Budget vs Discretionary Spending

Question

I have created a budget. Some bills are paid via a bank account where I can tie the transaction to a category. However, many budget items (e.g., grocery, fuel, gym, etc.) are paid using a credit card. I lump sum pay the credit card (e.g., $1,000) but in doing so, lose the allocations against my budget. I would like to be able to tie those expenses back to my budget. Also, I would like to better differentiate between discretionary, non discretionary and/or one time charges on my credit card. Lets say I have to have a tree cut down on my property and it costs $2,500. I want to be able to reflect that is not a normal or re-occurring cost. Without being able to reconcile my credit card spending against a budget and account for one offs, I can't really tell if my budget is realistic and/or whether I am managing. I am retiring next year and I really want to understand my bills from a non discretionary and discretionary spending.

bmciance · Answer

https://community.quicken.com/discussion/comment/20442424#Comment_20442424

It's actually quite simple.  When you download the 30 transactions into the credit card account these transactions will each hit a "category" that shows up in your budget.  Categories are used for expenses or income.  The $1,000 payment of the credit card balance is a transfer from an asset account (your bank checking acct) to a liability account (the credit card account).  The transfer has no impact on your budget as you are just moving money from one place to another.  In Quicken selecting a category on a transaction shows as just the category name ("Groceries" for example).  On the other hand, transfers will show the other account name in square brackets like "[Visa Card]" rather than a category.

Brad R · Answer

I have read about the transfer method, but it has not been explained in sufficient detail for me to understand. Lest say my credit card has 30 transactions that total $1,000. These transaction are downloaded into Quicken against the credit card. But, when I pay $1,000 against my credit card and the payment is reconciled, it basically represents a lump sum payment. I don't fully understand the transfer process where the individual charges are reflected against my budget

mshiggins · Answer

Regarding discretionary vs. non-discretionary spending, you can create Category Groups to group various categories, then use the Category Groups in your budget and spending reports. As the other answers pointed out, you will need to set up your credit card accounts in Quicken so you can track that spending along with spending from banking accounts.