Online transfer and category

[Zandex]

I am using MS Money 2008 Deluxe..Presently have several accounts..chequing
and credit cards.

Now this is my situation with MS Money..Whenever I download my bank
information into MS Money..I dont know which category to use for the
following:

- On the chequing account - If I make a payment to a credit card, what would
be the best category for this?

- On the chequing account - If I transfer funds between accounts, what
category should I use for this?

Regards,

Zandex

 

[Steve]

I am using MS Money 2008 Deluxe..Presently have several
accounts..chequing and credit cards.

Now this is my situation with MS Money..Whenever I download my bank
information into MS Money..I dont know which category to use for the
following:

- On the chequing account - If I make a payment to a credit card,
what would be the best category for this?

- On the chequing account - If I transfer funds between accounts,
what category should I use for this?

See the discussion thread named "funds transfer to another account.".

 

[Miguel29]

Dick Watson capably answered a very similar question for me a couple of posts
down "funds transfer to another account". It was very informative to me and
after trying it he is absolutely right on!
For the Credit Card payments I'm not sure yet (I'm really not qualified to
give any answers. I'm just pointing out what's already been pointed out to
me.) but for transfers definitely use the "Special" section of the
categories. If you have your accounts setup then if, say for example you
transferred $495 FROM chequing then while in the chequing register you would
select the appropriate account (which magically shows up under the "Special"
categories section [scroll way down to find it] and if you're sure then
accept. (I was unsure myself so just clicked "Enter" the first few times but
it doesn't seem to matter which order you use.) Then go to the account, say
AmEx for example (if you're sure that's where you transferred the funds) and
find that transaction. BEFORE you do anything check around that date (I've
noticed that my Visa transactions differ about 1 day) for the corresponding
transaction AND a possible and very likely DUPLICATE transaction. If you
click on that in the Advanced Register and click "Change" you'll get the
option to link it to the like transaction (the one that is the duplicate).
Go ahead and accept the transactions in both accounts.

Hope this helps but if you are, like me, kinda unsure about proper
accounting procedures then wait for a proper response. I don't want to lead
you down the wrong path if I happen to be full of hogwash on this topic!
(Note to others: If I AM full of hogwash then please say so in no uncertain
terms! I'm just relating what I've found from this forum and quite willing
to step back and stand corrected!)

At any rate, check out the thread I quoted above for more information. It
was spot on for me.

Cheers

 

[Dick Watson]

In general, if money flow doesn't make you richer (Income) or poorer
(Expense) then it should be a Transfer. This works fine when you pay a
Credit Card if there is a Credit Card Account in Money. But see the
exception below.

Depending on how you model your accounts and record your transactions in
Money, there may be some exceptions. Say you really don't want to track each
credit card transaction in Money as individual expenses. Or say you are just
starting using Money and have a $10,000,000.00 balance you are trying to pay
down. In either of these cases, you may want to just track the payments as
Expenses paid to a Payee and not create a separate Money Account. (In these
cases you might want to consider splitting the payments into an Expense that
pays the principal balance down (Category Bills : Credit Card or something
similar--but not Credit Card Payments / Transfers. Delete that one!) and an
expense for the interest, say Interest Expense : Credit Card.

The reason this is a Worst Practice for credit card accounts with ongoing
use is that it readily permits the user to game himself into thinking that
the amount you spent with the card on stuff plus the amount you spent on
interest is all the same thing--since you categorize it as the same thing
when you pay the bill--and masks where the spending really went and prevents
you from seeing, say, that you put $150 each month on the card for the
overpriced Starbuck's coffee. It provides much greater insight to see that
the spending occurred when it occurred--for the coffee and the interest than
to think it occurred when you paid the money back--too late after the fact
to be useful information.

 

[Dick Watson]

See also several q&a at http://umpmfaq.info/faqdb.php?cat=13.

 

[Miguel29]

hmmm, okay. Sort of jumping around here (I sure hope Zandexis getting as
much from this as I am!) but I'll read some more. . .

Good stuff. Thanks for all the help!

 

[Zandex]

I really appreciate effort reply to this situation. I believe this has been a
great struggle for me to understand. As seen in a previous post...for me
there were confusion around "Transfer: Account Name" via "Credit Card: Credit
Card Name"...I wasnt sure which to use..think I will be sticking to just
using Transfer.

 

[Chris Cowles]

As seen in a previous post...for me
there were confusion around "Transfer: Account Name" via "Credit Card: Credit
Card Name"...I wasnt sure which to use..think I will be sticking to just
using Transfer.

The difference is cosmetic, only.