Trying to Verify my Understanding of Savings Goals

Mike_L

Trying to get my hands around savings goals. Trying to understand what I have read on line,

As an example, Say:

I have an Bank account called Vacation.

I have a category called Travel.

I have set up a savings goal and the balance is 2000.

I purchase my plane ticket for 500.

As the savings goal is a fictional account, I need to use funds from the Vacation account to pay for the ticket and assign the transaction to the Travel category.

I then manually go into the savings goal and withdraw 500 to notionally move it back into the Vacation account giving the savings goal a new balance of 1500.

My Vacation account would then show the same balance in Quicken as prior to my purchase of the ticket, due to the notional transfer of the funds from the savings goal.

While the balance of the Vacation Account would show up to be less than the true bank balance, the funds are actually in the bank account even though I don't move the funds from the savings goal to the account before committing the funds.

If This is correct, I could see possibly using this for things like Vacations, Emergency reserves, Taxes, …, rather than setting up separate accounts.

q_lurker

While the balance of the Vacation Account would show up to be less than the true bank balance, the funds are actually in the bank account even though I don't move the funds from the savings goal to the account before committing the funds.

Let’s be clear on this aspect. You initially move funds (within Quicken) from the Vacation account to the savings goal. While in that state, Quicken will report the Vacation account with a reduced balance as compared to the real world account. As you move funds back to the Vacation account, the difference will diminish.

You can build the savings goal with ‘contributions’ from several accounts, but eventually need to return those funds to the original real-world accounts.

Yes, savings goals can be helpful for a wide variety of instances.

If I recall correctly, there is some way to have savings goals ignored in some reports such that the values of the donor accounts are accurately reported consistent with their real-world value.