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Best way to budget savings and how to handle spending from savings

sneff30

In my Excel budget I track savings into long-term, short-term, and sinking cost as a monthly expense. Our paychecks are deposited into the respective accounts so there is (currently) no monthly transfer that I could use to account for this. What would be the best way to go about recording our savings as an expense?

In the same vein, because we record our savings as an expense each month, we do not record spending from these accounts as part of our budget for whatever month the expense takes place. I think the best way to do this in Quicken would be to use a debit internal transfer in the savings account to reduce the balance (and reduce our net worth correctly) without recording an expense that needs to be categorized.

What are your thoughts?

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Savings Goals

Accepted answers

Jim_Harman

That sounds right. Savings goals essentially hide money that is actually in a real account so you can track it and are not tempted to spend it. The savings goal money is moved to Quicken asset accounts. You may find this blog post helpful

https://www.quicken.com/blog/how-set-savings-goals/

I suggest you create a new test file with some offline accounts and experiment before messing with your working data file.

All comments

Jim_Harman

Do you have different actual bank accounts for long and short term savings and sinking costs?

If so, you could record the deposits to these accounts as after-tax expenses in the Paycheck Wizard. Quicken will record these as transfers directly to the respective savings accounts. Normally Quicken will include savings accounts in your Net Worth and spending reports, but if you mark them as Separate, they will not be included in the reports.

If in real life these are actually all one account, you might want to look into Quicken's Savings goals, which let you create psuedo-accounts for various savings purposes.

Normally

sneff30

https://community.quicken.com/discussion/comment/20410482#Comment_20410482

Nope, these are just buckets in an Ally HYSA.

Tell me if I understand how Savings goals work:

I create a Savings goal, our net paycheck is recorded in the accounts that they are deposited in, and then the transfer from those accounts to the savings goals are treated as an expense from that account going to the goal. This is how it could be recorded as an expense for budgeting purposes. Do I have all that correct?

Jim_Harman

https://www.quicken.com/blog/how-set-savings-goals/

I suggest you create a new test file with some offline accounts and experiment before messing with your working data file.

Valderi

What you are looking for is precisely "savings goals".

In your accounts, you can see balances with saving goals (in Quicken) or without the saving goals (your balance will be your bank accounts)
I suggest to use as many saving goals you want but ALWAYS USE THE SAME ACCOUNT. If you mix your saving goals with your accounts, the balances won't be accurate. You can create saving goals A-B-C linked with account-1 and other saving goals linked with account2.
To help you recognize which bank account your saving goals are linked to, simply use a code at the beginning of the saving goal name. For example, I use "*" for one account and "**" for another.

I hope it helps. Good luck.