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How do I track transfers from accounts into my primary account

mikn67

I was never good at math. Accounting principles baffle me. I also have a tendency to overcomplicate things. This may be a rudimentary question but, I'm stumped. Currently, I keep some money in a savings account for future expenses. I track this money in, what I like to call virtual envelopes, manually created offline accounts within my accounts list. When I move money to the savings I categorize it as a transfer to the virtual envelope in Quicken. When downloading transactions, I see a debit from my checking and a deposit to my savings where I keep all the money within the virtual envelopes. When I move this money to my checking account to cover the expenses the money is intended for it gets complicated because I don't understand how to categorize the deposit to my checking account as anything other than income. I have a category titled Other Income to track this.
How do I show this transfer to my checking account without over-inflating my income every month? I could categorize it as a transfer, but how would I reflect that in my budget? I'm not seeing something I feel is so simple.

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Accepted answers

Rocket J Squirrel

@mikn67 You are using Quicken in an idiosyncratic, if creative, way that makes your goal tracking more difficult. You are fighting Quicken instead of taking advantage of what it offers.

Do you have a good reason not to use the built-in feature Savings Goals? If not, I suggest making a copy of your file and replacing your fake accounts with savings goals.

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Boatnmaniac

When you move the money from your checking account to your savings account you do it via a transfer category. In your checking account in Quicken enter a transaction to debit the checking account and in the category field enter the name of your savings account enclosed in brackets. (Example: [Savings Account name].) Quicken will then capture that as a transfer of cash between accounts and not as an expense.

To move that money back into your checking account do it in reverse using the name of your checking account enclosed in brackets for the category of the transfer transaction in your savings account. (Example: [Checking Account name].) Then the transfer will not be treated as income….it will simply be a transfer of cash between accounts.

If you manually enter these transactions into your accounts in Quicken before you download, Quicken should match the downloads to them. Then future transfers will likely be matched automatically but you might want to make sure you have your Preferences set up correctly to support this. This will help to ensure you don't get duplicate transactions in your registers (one from the manually entered transaction and one from the downloaded transaction). Go to Edit > Preferences > Transfer Detection > Check/tic the options shaded in yellow > OK:

Chris_QPW

I have a completely different take on this mostly because there is a fundamental problem with what @mikn67 is doing (there is also a wrong assumption on how transfer detection works made by @Boatnmaniac )

@mikn67 your system is bound to fail because you will never be able to reconcile your main checking account.

Reconciling of that account depends on being able to add up all the transactions that are in the account and matching to a known balance at your financial institution. Since your financial institution knows nothing about the transferring in and out of money from your offline accounts, the balance they have will never reflect those amounts. So, to reconcile you would have to somehow remove those amounts from the balance you get from the financial institution. Not only would that be very complicated, but it is also very error prone, and it doesn't sound like you are even trying to properly reconcile your main checking account.

Quicken isn't really setup for what you are doing even though others have come up with various methods to try to get around that limitation for this use case. The one thing in Quicken that can help in this goal is Savings Goals. (On the Planning tab).

When you create a Savings Goal Quicken creates an offline account with the name of the goal. And you can do transfers in and out of that account just like you would for any other account. The big difference is that Quicken has options that can show these transactions in the main checking account when doing the reconcile, but not at other times when you are trying to hide that amount from yourself/that main account.

Now back to what @Boatnmaniac was saying, the syntax for a transfer is exactly what he said, but he failed to understand that these transfers that are being manually entered never happen in the real world, and as such there isn't any downloaded transaction to match to. But even if there was transfer detection doesn't work for a transfer between an online account and an offline account. Transfer detect only comes into play when both sides of the transfer are downloaded transactions.

Boatnmaniac

@Chris_QPW -

Now back to what @Boatnmaniac was saying, the syntax for a transfer is exactly what he said, but he failed to understand that these transfers that are being manually entered never happen in the real world, and as such there isn't any downloaded transaction to match to. But even if there was transfer
detection doesn't work for a transfer between an online account and an offline account. Transfer detect only comes into play when both sides of
the transfer are downloaded transactions.

When I first read what @mikn67 posted I thought they said they were doing transfers from a downloaded checking account to a manual offline savings account they were using . If that is the case, then I agree, that process has a fundamental flaw for the reason you stated and should be fixed to avoid it eventually becoming unmanageable.

But they also said:

When downloading transactions, I see a debit from my checking and a deposit to my savings where I keep all the money within the virtual envelopes. When I move this money to my checking account to cover the expenses the money is intended for it gets complicated because I don't understand how to categorize the deposit to my checking account as anything other than income.

So that made me think that they are transferring the money between checking and savings and are downloading from the bank into both of those accounts. If this is correct, then I stand by what I'd posted as being accurate and the correct way to manage the transfers.

Upon retrospect, however, it appears that perhaps we need some more clarification on how these "envelopes" are being managed in or with the Savings account. That could be problematic it not done correctly. But if being managed with Categories or Tags instead of manual accounts it is still workable.

@mikn67 - Would you please clarify how you are transferring money. Are you transferring from your Checking account to your Savings account? And are you then transferring from your Savings account to manual "envelope" accounts?

If so, you should know that Quicken can work reasonably well with the envelope concept of budgeting but transferring money into manual "envelope" accounts If this is what you are doing, let us know and we can provide some options for you to consider that present a more robust and less problematic approach.

mikn67

@Chris_QPW @Boatnmaniac Thank you for your thoughtful responses. To clarify, I am making a physical transfer from a checking to a savings account and vice versa. However, I am not using the savings goal feature. I created my own savings envelopes. So my transaction has to be entered into two different accounts. Three, if you count the originating account. Two are detected in the reconciliation, the savings and checking, the other I just use to monitor the amount available, similar to the savings goal, I guess.

I guess my question has more to do with how it appears in my budget. The way I’m doing it, it shows as income in my budget. So, while I may be bringing home $1000 a week, the transfer from the savings account makes it appear as though I’ve brought home $1800 that week. Is there another way to track this money coming into the checking account without it inflating my income?

Chris_QPW

You have not described how you create your own savings envelopes. Without that we can only guess at what you are doing in the register. Furthermore, you have not said anything about the how the budget is setup. We would need to know that too.

But a VERY rough guess why the budget isn't working right is because you are double counting the money.

This would be no different than if someone decides to include a transfer in their budget and then also include the category that the money was eventually spent on.

mikn67

@Chris_QPW I creates an offline account then keep them separate. The money is still tracked in my savings account but I can see what it’s earmarked for in the separate accounts

Rocket J Squirrel

@mikn67 You are using Quicken in an idiosyncratic, if creative, way that makes your goal tracking more difficult. You are fighting Quicken instead of taking advantage of what it offers.

Do you have a good reason not to use the built-in feature Savings Goals? If not, I suggest making a copy of your file and replacing your fake accounts with savings goals.

mikn67

@Rocket J Squirrel I believe that is the way to go. I'm going to have to start working on that. Thanks.

mikn67

Okay. I took the leap and tried savings goals. It took me about an hour of playing around to figure out the nuts and bolts, and how it all functions, but this is so easy and makes so much sense. I'm not sure what I was thinking till now. Cue me banging my head against a wall.