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Budgeting for Loans - Interest and Principal

 
 
Dwayne Kroening
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      02-10-2004, 08:25 PM
I am using Quicken 2003 Premier and could use some help on budgeting as it
relates to loans. I would like to include separate budget items for both
Principal and Interest for my home morgage. Since budgets are based on
Categories, the obvious thing would seem to be to set a budget for each such
that a normal monthly payment check issued to the mortgage company would
show up against the two Categories of Principal and Interest. However, when
I set up a loan for my mortgage using the Quicken tools for creating a new
loan, the program seems to allow you to name the Category you want for the
Interest portion of your check payment (in the splits) by editing the entry
in the Scheduled Transactions list, but automatically sets up the Principal
portion of the split as a Transfer to the Loan account and so there is no
way to set up or to track the Principal portion as I can determine since
there is no Category assigned . Maybe I am missing a Loan setup step
somewhere, but any assistance on how to handle this would be appreciated.


 
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R. C. White
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      02-11-2004, 02:27 PM
Hi, Dwayne.

> I would like to include separate budget items for both
> Principal and Interest for my home morgage.


Then you want a Cash Flow Forecast, rather than a "budget".

> show up against the two Categories of Principal and Interest.


In Quicken-speak, Principal is not a Category, it is an Account. Quicken
Accounts are for assets (like a Checking Account) and liabilities (like
Mortgage Payable). Categories are for income and expenses (like Groceries
and Interest Expense).

See the several discussions about the difference between the two concepts.
One recent discussion that is still ongoing is "internal vs external
transfers", started by Speedlever on 2/7/04.

RC
--
R. C. White, CPA
(Retired - no longer licensed to practice)
San Marcos, TX


"Dwayne Kroening" <> wrote in message
news:c7bWb.22252$ om...
> I am using Quicken 2003 Premier and could use some help on budgeting as it
> relates to loans. I would like to include separate budget items for both
> Principal and Interest for my home morgage. Since budgets are based on
> Categories, the obvious thing would seem to be to set a budget for each

such
> that a normal monthly payment check issued to the mortgage company would
> show up against the two Categories of Principal and Interest. However,

when
> I set up a loan for my mortgage using the Quicken tools for creating a new
> loan, the program seems to allow you to name the Category you want for the
> Interest portion of your check payment (in the splits) by editing the

entry
> in the Scheduled Transactions list, but automatically sets up the

Principal
> portion of the split as a Transfer to the Loan account and so there is no
> way to set up or to track the Principal portion as I can determine since
> there is no Category assigned . Maybe I am missing a Loan setup step
> somewhere, but any assistance on how to handle this would be appreciated.





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John Pollard
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      02-11-2004, 05:00 PM
Dwayne Kroening wrote:
> I am using Quicken 2003 Premier and could use some help on

budgeting
> as it relates to loans. I would like to include separate

budget
> items for both Principal and Interest for my home morgage.

Since
> budgets are based on Categories, the obvious thing would seem

to be
> to set a budget for each such that a normal monthly payment

check
> issued to the mortgage company would show up against the two
> Categories of Principal and Interest. However, when I set up

a loan
> for my mortgage using the Quicken tools for creating a new

loan, the
> program seems to allow you to name the Category you want for

the
> Interest portion of your check payment (in the splits) by

editing the
> entry in the Scheduled Transactions list, but automatically

sets up
> the Principal portion of the split as a Transfer to the Loan

account
> and so there is no way to set up or to track the Principal

portion as
> I can determine since there is no Category assigned . Maybe I

am
> missing a Loan setup step somewhere, but any assistance on how

to
> handle this would be appreciated.


Unless this was changed from Q2002, you can budget transfers.
The [Account] "categories" should appear at the end of the
"Category/Account" drop down list when you click "Choose
Categories" on the "Budget" tab.

--

John Pollard
first initial underscore last name at bellsouth dot net


 
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