Budgeting for Loans - Interest and Principal

Discussion in 'Quicken' started by Dwayne Kroening, Feb 10, 2004.

  1. 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.
     
    Dwayne Kroening, Feb 10, 2004
    #1
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  2. Dwayne Kroening

    R. C. White Guest

    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$...
    > 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, Feb 11, 2004
    #2
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  3. Dwayne Kroening

    John Pollard Guest

    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
     
    John Pollard, Feb 11, 2004
    #3
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