A Quick Trick for Tracking Credit Card Expenses in Quicken

One advantage to having our Visa from our CU is that I can login, check the balance, and pay anytime during the month. Or multiple times during the month. As long as the item is present and working, I’m good.

I’m sure this can be setup with other online billpay situations.

Since we use a reward credit card for all our purchases (and pay it off monthly), I put into the checking account a placeholder each month for the average credit card bill and when it needs to be paid. So I can see that on Sept. 3, I need to pay $X to the credit card.

After I get the actual statement, I adjust the placeholder amount to the actual amount.

Quicken has some functionality that approaches what you are trying to do here JD. (If I understand it properly). If the account is set up as a credit card:

A. Like Chen said, Quicken’s Cash Flow section will net out the cash accounts (checking, savings, and credit cards) where checking and savings are (hopefully) positive and credit cards are negative, thus giving you a net total.

B. If you followed the credit card setup wizard, then as an extension of what Mark S. is describing, a scheduled bill will appear in your scheduled transactions section which will always reflect what your credit card balance actually *is*. Then, you can see that value in that list as well as the calendar (a handy feature I’ve only recently started taking serious advantage of)

Great way to manage it, but why the extra hassle, why not just use your debit card or cash? I’m guessing the answer is rewards, but is it really worth it?

As you an probably tell, just not a big fan of credit cards. To me it’s just buying things and paying bills using other people’s money, even if it’s for only 30 days. Would rather use my own money.

My strategy is to make as many purchases as possible using the credit card. Every month, at the *start* of the month I make a single payment on the card for my budgeted expenses. This brings the card into a large *positive* balance. Then as the month goes by the card balance slowly drops towards zero. Usually it stays positive for the entire month.

In this way, I never risk getting charged interest, overdraft fees, late payments etc, etc and I’m only ever spending money I know I have (because I’m always in credit). Normally I get paid a small amount in interest on the card balance as well.

If I have any large unbudgeted expenses coming up, I’ll make a payment a few days before to cover that as well.

I agree about this failing of Quicken, so I wrote my own Excel workbook to track it. Actually I use no fewer than 5 workbooks (in addition to Quicken) to track my finances. (Sounds like a Type A, doesn’t it?)

Anyway, I have two main checking accounts – one for bill payment (credit cards, loans, monthly bills) and one for my regular monthly spending (which is typically done only with cash or debit).

For the second account I use something like the envelope method in one of my workbooks. I have one sheet in the workbook for each category, and I debit that category immediately whenever I make a transaction.

If the transaction is done via a credit card, I immediately move money from the “spending” checking account over to the “billpay” checking account, so that the money is in the billpay account when the bill comes due. I DO NOT EVER SPEND MONEY OUT OF THE BILLPAY ACCOUNT. I ONLY PAY BILLS OUT OF THAT ACCOUNT.

FWIW, I use ING Direct for the billpay account, and a local credit union for the spending account. My transfers are done at ING Direct, from one checking account to the other.

This way, the money literally does disappear immediately.

Like I said, the money is typically spent via cash or debit (I tend to carry about $200 cash at all times, and for me, $200 cash will last about a month). However, the means of payment is, for me, simply a mechanism. If I spend cash, debit, or credit, it’s all the same to me since I always make sure it disappears from the spending account right away.

This is similar to what you’re doing, but for me it works better. It requires more maintenance, but the money literally disappears immediately.

Fun stuff.

Brad, another idea would be to do what I did: design an Excel workbook/spreadsheet to track cash flow. I personally think that is a better option than switching to Windows.

I like that. I work with Excel for my financial records, but I think I could do much the same thing there. I’ve managed not to have a credit card yet, but I’m hoping to get a reward one from my favorite craft store and pay off the balance each month (use it @ the store for extra points and for occasional other purchases).

Until now, though, I’ve been wary of them. During most of my childhood my parents were paying off a big credit card debt. I grew up thinking that they were scary cards.

-MM

I was reading these comments and thinking that a lot of people were giving many of the benefits of leveraging their money with credit cards, just to maintain tighter controls over their cash flow. Then I saw Daniel’s solution. I think he’s found the right answer. Let’s say I’m going to spend $1000 on something. My choices are:
a) pay cash now, lose the potential interst on that cash but not have to worry about screwing up my credit somehow;
b) put it on the credit card, then immediately pay the credit card (this is what most people seem to be saying) – not sure how this is significantly different than option a other than it doesn’t require you to actually have the cash on you (although a check or debit card would have the same result)
c) Daniel’s solution – charge it on the credit card and move enough money to cover the charged amount to a special holding account. This way, you still earn your interest on the money and get a free loan from the credit card company.

I think this is the best of both worlds. I’m not quite so Type A, but I do track my credit spending fairly closely each month, so that I know what I’ll need to pay when the bill comes due. This has the added benefit that I will see any fraudulent charges very quickly, rather than being ignorant anbout them until the bill arrives.

You guys are making this too complicated. Quicken is a nice program, but it is wayy too powerful for simple personal finance stuff like tracking expenses. I use EZ Money, a free, open source program that works on OS X and Windows (I’m sure you can compile it in linux). You can find it at http://adoracom.com/ezmoney/eng/index.html

When you enter a transaction (purchase/deposit/payment/etc), there is a checkbox called “pending”. You can then easily see which transactions are pending (not yet charged) and which ones have been charged. It also gives you a Balance and Actual number at the bottom… the Balance is what you actually have after all the transactions have been reconciled, and Actual is the amount that shows up online at your bank account/credit card. This way you don’t have to do any tricks, you can clearly see the two numbers side by side.

For example, for my credit card, my Balance is 643, but my Actual is 307. That means there is about 336 dollars worth of stuff that isn’t showing up on my online account yet. I use a Chase card and they are incredibly slow at getting transactions processed, I couldn’t live without this feature.

It is also setup with budgeting in mind, allowing you to setup monthly budget for specific categories.

There is also iBank if you use a Mac, but that costs money.

For quite a while, I used dummy entries in my Quicken checking account to track charges against paycheck income. However, this got complicated, for a variety of reasons.

Much easier is to do something along the lines of what Daniel describes. My credit union offers a money market checking account with a halfway decent interest rate, and you get access to all your credit union accounts online.

So, I opened a money market checking acct to complement my personal checking acct. In the personal checkng account, I keep enough for utilities, monthly insurance bills, and the occasional workman who has to be paid in cash or with a check (this would include enough for mortgage payments or rent if my house weren’t paid for). All recurring costs are automatically deducted from this account. At the beginning of a month I also set aside in interest-bearing accounts $200 for disposable savings and $350 for property taxes & car and homeowner’s insurance; at the end of the month anything left goes into savings.

In the money market account, I deposit the rest of my salary, which has to cover all other costs. I put these costs on credit cards…this requires me to keep a grip on expenditures during each credit-card billing cycle.

Using an Excel spreadsheet, I divide each 30-day billing cycle into four “chunks” corresponding roughly to weeks (it’s actually three 8-day chunks and one 7-day chunk). Dividing the amount deposited per billing cycle by 4, I get about $375 per week-long “chunk.” I create 4 columns, each starting with $375. Every few days or maybe once a week, I enter the amount of each charge as a negative number in that week’s column.

At the end of the “chunk” I click on the sigma button to get the balance. If it’s in the red, I know I need to economize the following week. If it’s in the black, I’m good. Keeping track of the amount I’ve spent vs. the amount I have in the CC account guarantees that I will never charge more than I have.

Keeping the CC fund in a money market checking account (which allows a limited number of debits per month) and paying the CC bill only once a month earns a little interest on part of my salary. Any money left over at the end of the month goes into my Roth IRA.

Charging ALL my expenses other than recurring monthly bills–such as groceries, gasoline, etc.–builds up a nice kickback from American Express at the end of the year…I usually get around $350, which also goes into the Roth IRA.

In Quicken, I enter the charges again in an account to track charges. Because I track a lot of things in Quicken and because Mac’s version leaves a lot to be desired, the overall “balance” feature is useless; the tracker account serves to categorize expenses for tax reports and to give me an occasional view of where the money is going over the long term.

I did that with my first credit card in the late seventies. It kept me from going into debt. I entered my credit card charges in my (paper) check register, and kept two balances, the bank balance, and the balance after paying off credit purchases. Nowadays, I use a debit card instead of a credit card so the bank’s idea of my balance matches reality.

How about this? Use a debit card.

I agree with glblguy, using debit or cash is better. It’s been proven that people spend more than they intend when they use CC’s.

Proposed approach is wrong and complicated. There is no point of recording same transaction twice. And, by the way, credit card purchases are not cash purchases and you can’t mix them up with you checking account transactions. Quicken already has all tools that you need to track your credit card debt.

1. Set up credit card account in Quicken and record all credit card transactions in this account.

2. When you make credit card payments record them as Transfers from your checking account to credit card account.

3. Keep an eye on Cash Flow and Income Statement and Net Worth reports.