math for budgeting

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I have been mystified by budgeting in Quicken every year. 2017 is no exception. My needs are rather simple. Income is from Social Security direct deposits and a monthly transfer from investment accounts. The amount of that transfer depends upon my budget needs. Not every month has the same number of weeks. Budget items such as groceries, will increase/decrease depending on whether it is a 4 or 5 week month. There are also expenses that occur once per year. That seems perfect for rollovers, so that you budget an amount each month, so that there are sufficient funds to cover the periodic expense. Ideally, I could change the amount of the transfer from investments to arrive at a balanced budget. But, I can't seem to find a report that will easily let me see my projected cash flow. I know nobody thinks like me...but it seems that the totals at the bottom of the annual view are very different than what I get using a spreadsheet. I did select Detailed Loan Payments and made sure that the individual categories were unchecked. That nudged me closer, but it still looks worse than it should. I don't have the energy to trust my own feeling rather than Quicken.  Would someone have mercy on me??
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DonH

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Posted 9 months ago

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Larry

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I imagine one of the experts will reply later, but in the meantime I had a similar issue and here is something to try.  See if "view reminders" is selected in Budget Actions/Budget Options.  I believe it's the default, un-check that and run the reports again.   
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DonH

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That helped...sort of. It added the reminders for the detailed loan payment of my mortgage, but not my car loan. I just checked. My car loan payment is set as a reminder on the 23 of every month. With the View options set to include reminders the car payment should at least be consistent with the mortgage and show as an actual every month.
Strange that it is seen as an actual expenditure before it is actually entered. In my world it's not actual until it is actually committed. A reminder is more like a budget amount until it is committed. Regardless, I can deal with it, if consistent. logic should be consistent...or it's not logical ;-)
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Larry

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you're sort of welcome :)
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DonH

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Seriously, I must be the only one who wanted to determine the amount I would need to have transferred from investments. Quicken had a great historical account of what was spent by category. With the death of my wife, I could make an educated guestimate of what each category's budget would be. I knew what the social Security income would be. Most unknowns were known! What was yet unknown was the amount of the transfer from investment account/s to checking should be to ensure a positive cash flow each month. Now if I could figure out why The car loan is not showing in Detailed Loan Payments, Q2017 should give what I need.
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Scott

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You've budgeted for known expenses, you have known fixed income from SSA and so the difference is your required pull from investments to balance your budget.

If you include an income category in your annual budget for SSA,, then you should see the amount necessary to pull from investment sources on the totals line, at the bottom of the budget.  In Annual view > Budget only it will show your investment withdrawals for current and future months.

If you need to see the Totals line zero-out, simply transfer the figure to the category line item you keep for your investment income.

Personally, I only budget for expenses and I look to the totals line to see my monthly pull from investment sources. Im retired, but too young for SS)

Sorry, can't help with the car loan thing.
(Edited)
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johnthewonderful

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Scott:  I notice that you do not display the super-category called Personal Expenses.  That is the one used to balance against Personal Income to determine Total.  Was that deliberate?
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Scott

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I do use personal expenses as my discretionary expense category group.  I didn't show it in the image, just showed my non-discretionary category group.

I dont use the Personal Income category group, just used it in the image to illustrate a point.  Not sure that I will use Personal Income in the future.  I set my living expenses in Lifetime Planner, translate that yearly expense into detailed Budgets. From there, its pretty easy to see what my withdrawal from investment sources should be each month.  
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johnthewonderful

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In my experience, trying to budget every detail is nearly impossible and generally frustrating.  Try joining the "Over and Under Club".   There's a lot to be said about being close enough.  lol

Big Picture:
To help me get out of the same box, I decided that I would first get my Reminders reasonably correct.  Then I used this projection to populate the budget.  Once the minor adjustments are made, it is a simple matter to add the additional income into the budget from your investments to balance the budget.  Four vs. five week months (they only occur once per qtr,) are of minor concern with a little working reserve in the checkbook.  Philosophically, the Budget then becomes merely a guide to make sure that the cash projection, plus the transfers, come true.  (I suppose that you could add a Reminder for an average transfer.  Once made, correct the Reminder to the actual amount.)


How to make a Reminder for unscheduled Expenses:
Once the Reminders are defined for all of the known items, the question then became one of how to deal with the messy stuff...gas for the car, food, entertainment, etc.  To get a REASONABLE number for that Reminder, I did a 6-month historical report of all my messy expenses, divided by 26, and created an artificial weekly reminder. The reminder is merely deleted once it reaches the checkbook; it was only a place-holder to generate a reasonably correct graph. The end result will generate a projected cash-balance. 
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Scott

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After 23 year, I finally got around to learning about budgets and setting one up in Quicken....so relatively new to the budget features....

+1 on the big picture.

I ended up not using reminders at all (turning it off for budget purposes).  Found it confusing to see reminders hitting my "actuals" in future months. I ended up using the "everything else" line item for those messy, small expenses that come in month to month.  I then converted this "everything else" line to a budgeted monthly amount.  That way, it would not show up as actuals in the future and the "everything else" budget line actually does provide a drill down on the categories that show up (in the Graph view).
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DonH

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Ok I still don't know why the car loan reminder (Detailed Loan Payments) does not show in the future month's actuals when in Planning tab/ Budgets while the mortgage payment does. If anything, I would think it would be the other way around. It only makes sense that the Car loan payment and mortgage payment would be handled the same.

I set up both loan payments in the budget, knowing what it is and that it's due each month. I like to budget when something big changes. In this case, my wife died and I wanted to make sure that the amount in my checking would always be enough to comfortably cover expected expenses. Being overdrawn would add to my already considerable distress. So I budget to see what can and should be reduced or eliminated. It's my future planning tool. when you budget items with a predictable amount that occurs only once or twice per year. Reminders showing up as actuals for the month it is paid, allows accumulating an 1/12 of the amount each month. That's what the rollover is for. I rollover positive amounts each month to have the category zero out when the payment is due.

I agree. What used to be called a super category, any sub categories and "anything else" is a handy way to quickly budget. For example, I can either eat at restaurants or buy groceries to cook. I can set up a super category of meals and have 3 subcategories, eating out, groceries, and everything else. I can budget a monthly amount and Quicken will add the subcategories to come up with a single Meals spending. If I'm constantly over budget, I can get a report showing the amount spent for each sub category. That could inform me that Eating out is too expensive and I could cut that back and enjoy cooking more. but there is no point having a category if you aren't willing to change your spending habits. I have seen the "paralysis of analysis". Too much information is worse than not enough!

Now, I am using the Cash Flow in the Home tab/ cash flow. I can toggle to any future month and Loan Payment accurately reflects future mortgage and car loan amounts.

I guess budgets are for planning the future, Cash flow is a different animal. I can adjust to most anything when I know what I'm adjusting to!
You can mark this question as solved.
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QPW

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Some term translations:
"super category" => category group
"class" => tag

And on the subject of planning vs cash flow.

It is certainly the case that the budget was designed to be a budget, as in "planning".
A lot of people don't get the distinction between that and cash flow.

To that end they have graphed on some cash flow kind of features, but there are certainly gaps and bugs in that.  Yeah there is bugs in all of it!  :-)

I use to think that the reports were a lot clearer until some people pointed out bugs in them.
And one thing that pops up is the fact that for somethings like the Everything Else its "meaning" changes depending on it the view is in Graph or Annual view, and is missing in the reports.
Reminders aren't an option in the reports.  So all of this isn't consistent.
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Larry

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to pile on the consistency issue -
Budget for Business and Personal items should be handled the same way and they are not.  In practice Personal and Business are simply super categories, should just be be handled as such in all reports, all displays, all totals.  If there is a bug or feature for Personal budget I would expect the exact same behavior for a Business budget item.        
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Snowman

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DonH I agree that the cash flow reports are flawed.  The budget is a planning tool that shows your income vs expenses.  The budget does not know if there is enough "cash" to cover the budget.  A cash flow report will start with an amount of cash that you have one hand and then run your budget with that in mind.  You will then see if your budget is valid or if you need to change spending patterns.

I have had issues with the budget for several years now.  First it can't add properly, second if you have parent categories (a category with subcategories) Quicken will allow you to code a transaction to that parent category a serious flaw accounting wise and also because it will create bad data in reports.  I was "suggested" to me that my take on this was stupid because what happens if there is a transaction that does not fit any of the subcategories.  The solution is simple either create a subcategory that fits the need OR create a subcategory called Misc-Auto Expenses for example.

The rollover function is poorly implemented.  In the annual view lets say you have a category Food, you budget it for say $200 per month.  If you rollover that category the annual review will change and for February it will be $400, March $600 and so on.  Very unrealistic.  The rollover should only apply to the month following the current month.  So February would be still be $400 but the remaining months of the year will be $200.  Because of this I will "rollover" amounts from the previous month manually for the categories that I want to do this with. 

It sounds like your needs are simple so I would suggest creating a simple Excel spreadsheet that will give you the information that you require.  This can also serve as a check on Quickens math which is how I found out that it couldn't add properly.