How setup Quicken for future expenses?


M

me

Id like to start "saving" money for future expenses
such as the replacement cost of another car, or a new
PC, new furniture, vacations, etc.

What would be best way to setup Q99 for this?

Would I create "liability" accounts for this since the
money is "spent"..... but just spent in the future?

Advice? Thanks!
 
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A

Allan Martin

Id like to start "saving" money for future expenses
such as the replacement cost of another car, or a new
PC, new furniture, vacations, etc.

What would be best way to setup Q99 for this?

Would I create "liability" accounts for this since the
money is "spent"..... but just spent in the future?
No. Open up a new interest bearing bank account and add it to your chart of
accounts. Now start putting money in the account.
 
A

Allan Martin

Id like to start "saving" money for future expenses
such as the replacement cost of another car, or a new
PC, new furniture, vacations, etc.

What would be best way to setup Q99 for this?

Would I create "liability" accounts for this since the
money is "spent"..... but just spent in the future?

Advice? Thanks!
 
R

R

Id like to start "saving" money for future expenses
such as the replacement cost of another car, or a new
PC, new furniture, vacations, etc.

What would be best way to setup Q99 for this?

Would I create "liability" accounts for this since the
money is "spent"..... but just spent in the future?

Advice? Thanks!
Instead of "liability" accounts, you'd need "accrued" accounts.
Example: You want to buy a new PC, for $1,200, by putting away $200 a
month.
In months 1 - 6, you would put the $200 into a separate savings or
checking account from your current account. The journal entries (and
thus the accounts you need in QB), would be:
Dr Cash #2 (deposit into new account)
Dr PC Purchase "savings" (an asset account)
Cr Accrued PC Purchase (a contra asset account that would look like a
negative asset, but it is not a liability account)
Cr Cash #1 (withdraw / transfer from old account)

When you buy the PC, the journal entries would be:
Dr Fixed Assets (assuming you captialize the PC)
Dr Accrued PC Purchase (to zero out this account)
Cr Cash #2 (withdraw to pay for the PC)
Cr PC Purchase "savings" (to zero out account)

Let me know if this helps.

Regards,
Russell Tuncap, CMA, CPA
www.tuncap.com
 
M

me

Let me know if this helps.

Russell I think that will help a lot. But I will have
to print it out and read it a few times to wrap my head
around it

By the way....I'm using Quicken and not Quickbooks.
Does that make a diff on your methods?
 
B

Beverly

Russell I think that will help a lot. But I will have
to print it out and read it a few times to wrap my head
around it

By the way....I'm using Quicken and not Quickbooks.
Does that make a diff on your methods?
 
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B

Beverly

I assume that this is for personal finances? You're really better off
with Quickbooks if it is for a business.

Does your version have savings goals? I have an interest bearing
checking account, so I don't need to physically move the money to an
interest bearing account... but you should if you are saving for a
long time. Just name the account, in Quicken, whatever you are saving
for and transfer the money from one Quicken account to another when
actually making the transfer. Otherwise, use savings goals if your
version supports this and set up an automatic scheduled transaction to
transfer money to the goal account.
 
M

me

Otherwise, use savings goals if your
version supports this and set up an automatic scheduled transaction to
transfer money to the goal account.
Hi Beverly

Yes this is for personal finances only

I'm using Quicken 99 Basic... and I'm pretty sure it
doesn't have "savings goals"

I think I will have to upgrade to get savings goals. Is
it worth the upgrade in your opinion? Is savings goals
the feature I'm looking for to do what I want.... i.e.
save for "expenses" in the future such as vacation, new
furniture, etc?
 
M

me

You're really better off
with Quickbooks if it is for a business.
Off topic question... but would Quickbooks make a good
"tool" even if just used for personal finances?

Or best to stick with Quicken only?
 
R

R

I apologize... I interpreted your question to be business related, not
personal finances. My original suggestion was strictly business
minded; not really practical for personal financial planning.

I would agree with Beverly... you should stay with Quicken.
QuickBooks is much better for business than personal finances. I'm
not well versed in Quicken, so I can't give you any opinion or
suggestions in that program.

Through all of this, I do commend you on saving cash for your
purchases, not buying on credit and going into debt. For more on this
philosophy, you should check out www.daveramsey.com

Good luck,
Russell Tuncap, CMA, CPA
www.tuncap.com
 
B

Beverly

Hi Beverly

Yes this is for personal finances only

I'm using Quicken 99 Basic... and I'm pretty sure it
doesn't have "savings goals"

I think I will have to upgrade to get savings goals. Is
it worth the upgrade in your opinion? Is savings goals
the feature I'm looking for to do what I want.... i.e.
save for "expenses" in the future such as vacation, new
furniture, etc?
"Savings goals" is just a fancy way Quicken has of transfering your
money to another account within Quicken. The benefit of using savings
goals versus just creating a "fake" savings account to "hide" your
money in may not justify the investment if that is your only upgrade
need.

To do the same thing (or quite similar, actually) in your version,
just create "savings" accounts for all your savings needs... naming
them after for whatever you are saving. Then, in Quicken, make a
withdrawal using the new savings account as the category to transfer
the money in. This will sufficiently separate the funds. When you
have enough for your purchase, simply make a withdrawal from the new
savings account and use checking as the category.

To be fair, I'll let you know what the difference is in using
Quicken's bonafide savings goals feature is:
1. There is a nice graphical interface which allows you to set a due
date for a savings goal and a bar chart shows you where you are in
meeting that goal on that date. It also suggests the monthly
contribution necessary given the current status.
2. It treats the savings goal account as an asset rather than a
cash/savings account.
3. At any time, you can hide the savings goals in the checkbook
register and see what is really in your account. This is NOT
necessary for reconciliation.

Personally, I use savings goals for any expense that I have which does
not occur monthly. That is how I always have enough to pay my car
insurance in full every 6 months rather than use their payment plan
which only increases the expense. I also use savings goals to
maximize my benefit of interest free financing offers... keeping the
money in an interest bearing account until just before the interest
free period runs out. I did this with "fake accounts" in Quicken for
years until the savings goal feature came out (I began using Quicken
in DOS).

To answer your follow-up question, I would not recommend you use
Quickbooks when Quicken suffices. There are just too many features
that the average person would not use and could confuse the issue for
you.
 
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A

Allan Martin

Hi Beverly

Yes this is for personal finances only

I'm using Quicken 99 Basic... and I'm pretty sure it
doesn't have "savings goals"

I think I will have to upgrade to get savings goals. Is
it worth the upgrade in your opinion?
Save your money.

Is savings goals
 
M

me

To answer your follow-up question, I would not recommend you use
Quickbooks when Quicken suffices. There are just too many features
that the average person would not use and could confuse the issue for
you.
OK Beverly... thanks so much for your help!!

I will stick with Quicken for now
 
M

me

To do the same thing (or quite similar, actually) in your version,
just create "savings" accounts for all your savings needs... naming
them after for whatever you are saving. Then, in Quicken, make a
withdrawal using the new savings account as the category to transfer
the money in. This will sufficiently separate the funds.
But wont the above throw my actual balance off in my
checking acct?

Cause after all all I want to do is "separate" funds in
my checking acct that are "earmarked" for future
expenses such as anticipating needing new furniture
years from now ( due to wear).... that kind of thing.

Please bear with me Beverly and others! Thanks so much
for the help!
 
M

me

Through all of this, I do commend you on saving cash for your
purchases, not buying on credit and going into debt. For more on this
philosophy, you should check out www.daveramsey.com
Hi Russell... yes I should have been clearer on this
being a personal finance question. Sorry!

But yes.... the above reference to dave ramsey is
EXACTLY why I want to start "anticipating" expenses way
in advance and saving up for them instead of borrowing

After all.....certain things in life just plain wear
out and need replacing even if after many years use....
i.e. furniture, cars, etc
 
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B

Beverly

But wont the above throw my actual balance off in my
checking acct?
It would be an unreconciled transaction similar to a check which has
not cleared the bank yet. You will still be able to reconcile to your
bank statement.
Cause after all all I want to do is "separate" funds in
my checking acct that are "earmarked" for future
expenses such as anticipating needing new furniture
years from now ( due to wear).... that kind of thing.
To separate is to remove from the rest, is it not? If you keep the
money in your running balance, you will be more likely to spend it
than if it is removed from the running balance. Your physical
checking account will still have the money... it will just be split
between spending and separating accounts in Quicken. If it makes you
feel any better, name the "saving" account "checking-future purchases"
whereas the "spending" account name remains as is.
Please bear with me Beverly and others! Thanks so much
for the help!
No problem. Glad to do it.
 
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