When using Quicken, should I count inflation as an expense?
This depends on why you are tracking your expenses.
Different people will do different calculations because they are asking different questions.
Maybe if you write out your reason for tracking expenses, the answer will be clear.
For example, we track expenses so we can see whether this year's spending generally reflects our priorities. "Gee, we're spending more on meals in restaurants then we give to charity" might be an observation that would lead us to change our spending. I don't think that calling the "loss of purchasing power on my assets" (which seems to be what you're entering) an "expense" really helps with that discussion. Maybe you would see a use.
And, we track expenses so we can make big decisions. "Can I afford to retire?" is a big question. Knowing expenses in enough detail to think about what might go up or down after retirement, and where we should allow for the rare but large expense, and how much we're spending on discretionary that could be cut if needed, can help us decide how much retirement income we'll need.
Again, the loss of purchasing power on our assets doesn't seem to be an important factor there. It's on the other side of the ledger - determining how much income we will have available.
But, maybe you want to do a full reconciliation of beginning of year assets, plus income, minus expenses, equals ending assets. Maybe you want to do an constant-dollar adjustment on the ending assets. If so, somewhere on your worksheet you need an charge for lost purchasing power. Now you need that number. In my case, I calculate the number, but it's in a worksheet outside Quicken. Maybe you're doing more with Quicken than I am, so it makes sense for you to enter it there.
