Categorize loan payment as transfer AND expense


D

Duncan A. McRae

Greetings:

I have my car loan set up in Quicken XG. Right now, loan payments are
recorded as transfers from my chequing account to my (negative-balance) car
loan. Which is fine, but I'd also like those payments to show up in the
Auto expense, so I can get a more accurate picture of what my car is costing
me in a month.

Suggestions?

Thanks a lot;
Duncan

PS -- my email address is fake; please respond to the group.
 
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D

Dick Weaver

Duncan said:
Greetings:

I have my car loan set up in Quicken XG. Right now, loan payments are
recorded as transfers from my chequing account to my (negative-balance) car
loan. Which is fine, but I'd also like those payments to show up in the
Auto expense, so I can get a more accurate picture of what my car is costing
me in a month.

Suggestions?
Good question - what does your car cost you in a month?
Do you pay insurance every 6 months? Does this month "cost" 1/6 of
that?
Drove 5k miles in May, 10k miles in June. In July you get a 30k
service.
DOes May cost twice as much of that service as June? Or are the
May, June miles free and July get the entire service cost?
If you believe the car will last 200k miles and you drove 10k in June
didn't you in June consume 1/20 of the car - 1/20 of the purchase $?

Hmmmm, the loan payment is not part of what the car costs in a month.
The loan obligation exists because of the car, but the cost of the
month you drove 10,000 miles on vacation is very different from the
month with only 1,000 miles commuting - and it's not just the gas.

dick w
 
T

Thomas

The cost of the loan does go into the mix.It has to.you You take the
total expenses for that month >loan,tax,fuel,insurance,service,whatever
and divide it into the mileage to get THAT months cost per mile.you will
find some months are obviously higher but you will get the true average
over a year what it costs a mile.You will be surprised on what a
automobile costs to operate per mile when you figure all this into the
mix(which you have to to get the true result)
 
D

David Botters

I have the exact same question. If anyone knows or has any insights, please advise.

Thanks!

David
 
F

Fred Smith

1. Interest is part of the cost of owning a car, so it should be expensed.
The only thing going to the loan account should be reduction of principal.

2. Other than interest, whether you have a loan or not, the cost is the
same. You can record this depreciation in one of several ways:
a) use your local tax rules (for example, 30% declining balance in Canada)
b) charge based on distance traveled (eg, 20 cents per mile)
c) update the value of your car periodically (eg, using Carpoint), charging
the difference as an expense

I don't think it's crucial which method you use -- it's more important to be
consistent. For the record, I use method (a).
 
D

Duncan A. McRae

Thanks for all of the accounting advice, fellas. Can someone please
tell me how to get the loan payments (currently a transfer) to show up
as a categorized expense.

Thank you;
Duncan
 
F

Fred Smith

A loan payment is not an expense -- it's a reduction of a liability. That's
why they don't show up as expenses.

If what you're really asking is to budget for the payments, that's easy to
do. Quicken supports transfers as part of a budget.
 
D

Dick Weaver

Duncan said:
Thanks for all of the accounting advice, fellas. Can someone please
tell me how to get the loan payments (currently a transfer) to show up
as a categorized expense.
In account A, a transfer to account B of $50 is:

50

Instead, make the following two entries:

in account A: any-expense-category-you-want -50
in account B: any-expense-category-you-want 50

The expense category used in account B can the same as, or different
than, the expense category used in account A - whatever meets your
needs. The signs I've shown with
the amounts are illustrative.

dick w
 
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D

Duncan A. McRae

Thanks Dick! But if I have the same amount in both accounts, one +ive and
one -ive, won't they net zero and still not show?

I think I figured it out, but it's too late at night to retrace my steps.
When I have a spare moment, I'll do so and post my "solution". Others might
find it useful too; I use it to get a more accurate picture of where my cash
is going each month (technical "expense" or not).

Cheers;
Duncan

Dick Weaver said:
Duncan said:
Thanks for all of the accounting advice, fellas. Can someone please
tell me how to get the loan payments (currently a transfer) to show up
as a categorized expense.
In account A, a transfer to account B of $50 is:

50

Instead, make the following two entries:

in account A: any-expense-category-you-want -50
in account B: any-expense-category-you-want 50

The expense category used in account B can the same as, or different
than, the expense category used in account A - whatever meets your
needs. The signs I've shown with
the amounts are illustrative.

dick w
 

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