Be careful calculating your expenses

[Rich_by_the_Bay]

DW impulsively ran a canned Quicken report to check our YTD expenses.

At first glance it was a shocker, way higher than I thought. After a moment of panic, we dug into it and realized that the report included savings for retirement as an expense (i.e. transfers to our portfolio accounts - an expense ("outflow") to quicken); it failed to include refunds which would reduce our expenses; and it included a few major purchases including a cheap car, a $2000 dinghy tow hitch setup for the RV, and a not-cheap king bed and headboard (we plan to handle major purchases from a separate acct after ESR turns into full FIRE). It also covered two semiannual big insurance premiums paid in Jan and July which won't repeat until next year, hence misleading for a 7 month snapshot. This 7 month slice came to a tidy sum when annualized.

There were a few other flukey, quickenesque issues but finally we whittled it down significantly. In the end, it was very close to our assumptions. Phew!

Just a word of caution especially for those who are not fully retired - go over those expense reports very carefully and match them with real world sanity checks. We'd have been blown away if the original report above were the basis of our planning.

 

[REWahoo]

Whaddya do all day? - I mean other than change your shorts after running a Quicken expense report...

 

[Rich_by_the_Bay]

Whaddya do all day? - I mean other than change your shorts after running a Quicken expense report...

Get off my lawn.

 

[Bikerdude]

Get off my lawn.

An old retired curmudgeon already.

 

[FIREd]

I know what you mean Rich. You really have to check what Quicken includes (and doesn't include) in the generated expense report. I've set Quicken to ignore internal transfers.

 

[Nords]

I haven't been able to make Quicken tailor its reports very well-- those "internal transfers" really screw up my attempts to compare expenses vs budgeted amounts.

 

[Rustward]

Just a word of caution especially for those who are not fully retired - go over those expense reports very carefully and match them with real world sanity checks. We'd have been blown away if the original report above were the basis of our planning.

Fully understand. Generally I use "Last 12 Months" time frame for expense reports. It levels out those once(or twice)-a-year expenses that can skew the report a lot depending on when you run it.

BTW: sometimes we pay property taxes in December and other times we pay them in January. I usually record the January payments in Quicken with a December date and a memo that says something like "actually paid mm/dd/yy", so that a YTD Quicken report would be closer to reality, for the purposes of understanding YTD expenses.

Sanity checks -- good advice.

 

[frayne]

One word, Excel !

 

[spncity]

In Quicken - if you categorize those internal transfers as TXFR instead of EXP - does that fix the reporting?

I realize it does not address all of the things one must analyze.

 

[Rich_by_the_Bay]

I haven't been able to make Quicken tailor its reports very well-- those "internal transfers" really screw up my attempts to compare expenses vs budgeted amounts.

Turns out you can customize and then memorize a report to do exactly as you want, but it takes a while to figure out what Quicken wants. Ultimately we included obvious expense categories, then created one called Major Purchases and excluded that from the report (cars, etc.).

 

[Rich_by_the_Bay]

In Quicken - if you categorize those internal transfers as TXFR instead of EXP - does that fix the reporting?

I realize it does not address all of the things one must analyze.

You can just unselect them when setting up a customized report, then memorize that report once and for all.

 

[Nords]

In Quicken - if you categorize those internal transfers as TXFR instead of EXP - does that fix the reporting?
I realize it does not address all of the things one must analyze.

I have approximately 150,000 transactions in over two dozen accounts stretching back to 1992. Recategorizing is not an option.

Part of the problem appears to be the type of report, but I haven't yet had the patience to get through a complete troubleshooting procedure. I usually line out the irrelevant data and pen & ink the corrected results.

In the eighth year of ER, we're not really doing that much budgeting anymore either. Our use of Quicken has become more of a "When did we buy that?" database than a financial-management tool.

 

[Rich_by_the_Bay]

In the eighth year of ER, we're not really doing that much budgeting anymore either. Our use of Quicken has become more of a "When did we buy that?" database than a financial-management tool.

I can see that happening, definitely.

Seems to me the most vulnerable to this kind of expense miscalculation are those in the pre-retirement phase setting up call and balances assuming you need $40K to meet expenses only to find out that because of the way the program works, you really need $60k. Talk about your "just one more year" syndrome...

 

[bbbamI]

One word, Excel !

Yes...I agree.

My spreadsheets are unique as they are my own and suit my needs. Now, no one else would be able to figure them out, but that's ok.....

 

[shotgunner]

One word, Excel !

I agree, been using Excel for many years to keep track of my investments and budget. It works well and it's cheap!

 

[Gumby]

I also vote with the self-created spreadsheet crowd. Since I created it, I know exactly what goes where and how each component affects the whole. I never got a warm feeling from the somewhat "black box" nature of canned programs like Quicken.

 

[scrabbler1]

Same here for creating homemade spreadsheets for monitoring expenses, both current and projected. They were valuable for figuring out if/when I could ER back in 2008.

 

[frayne]

What I like about Excel as opposed to a cookie cutter program is you can customize it, anytime and in any you see fit. Easy to graph as well if you like pictures.

 

[jebmke]

What I like about Excel as opposed to a cookie cutter program is you can customize it, anytime and in any you see fit. Easy to graph as well if you like pictures.

Agree. Also, for me it is simple to keep everything in a spreadsheet. Most of our expenses are on 2 credit cards and they both make it easy to download the transactions into a spreadsheet. All I have to do is add a handful of direct debits (like utilities, cable), an occasional check and ATM transaction. I can do a quarter's worth of expenses in about 30 minutes. Since some categories (insurance, prop taxes) are one a year, I customize my rolling averages to adjust for these being 12 month expenses. The rest is noise.

 

[ERD50]

I agree, been using Excel for many years to keep track of my investments and budget. It works well and it's cheap!

One other word: OpenOffice. It works well and is free!

OpenOffice.org - The Free and Open Productivity Suite

-ERD50

 

[audreyh1]

Yeah - I know really well to recheck the reports. But once you get all the categories, etc. cleaned up they work very well.

Until you add new accounts or create new categories or change credit cards or whatever - then you have to be careful to go through your old reports and make sure all the right stuff is selected.

I also have to be careful running ROI type stuff, as sometimes it doesn't handle fund transfers very sensibly - although it won't usually be way off. I cut and paste the result into a spreadsheet if I need to take out some of the senseless entries to be more accurate. Very little trouble.

But, hey - all this functionality is way better than nothing. The reports are incredibly useful. We know way more about our finances than we would have otherwise, and it really helps with the planning and reviewing the outcomes of past decisions.

Audrey

P.S. There is absolutely no way Excel could handle all the stuff I do in Quicken. It's not a "black box" - it is easy to see what it is doing for each report, and very, very easy to drill down and look at different snapshots - something that is far harder in a spreadsheet.

But each to his own! We have almost 20 years of detailed financial transactions in Quicken.

 

[Rich_by_the_Bay]

P.S. There is absolutely no way Excel could handle all the stuff I do in Quicken. It's not a "black box" - it is easy to see what it is doing for each report, and very, very easy to drill down and look at different snapshots - something that is far harder in a spreadsheet.

But each to his own!

Agree; I'm fairly comfortable with XL but the memorized custom reports (fully formatted), type-ahead input fields and multilevel organization of features and accounts make Quicken a good choice for us, notwithstanding its faults and deficiencies.

I use google spreadsheets to track investments.

 

[FIREd]

Yeah - I know really well to recheck the reports. But once you get all the categories, etc. cleaned up they work very well.

Until you add new accounts or create new categories or change credit cards or whatever - then you have to be careful to go through your old reports and make sure all the right stuff is selected.

I also have to be careful running ROI type stuff, as sometimes it doesn't handle fund transfers very sensibly - although it won't usually be way off. I cut and paste the result into a spreadsheet if I need to take out some of the senseless entries to be more accurate. Very little trouble.

But, hey - all this functionality is way better than nothing. The reports are incredibly useful. We know way more about our finances than we would have otherwise, and it really helps with the planning and reviewing the outcomes of past decisions.

Audrey

P.S. There is absolutely no way Excel could handle all the stuff I do in Quicken. It's not a "black box" - it is easy to see what it is doing for each report, and very, very easy to drill down and look at different snapshots - something that is far harder in a spreadsheet.

But each to his own! We have almost 20 years of detailed financial transactions in Quicken.

+1

 

[walkinwood]

I use a combination of saved reports, that have the categories I need/use checked, and a spreadsheet.

At the end of each month, I export my customized "Monthly expense report" to an excel compatible file and import it into my monthly expense spreadsheet.

I find the combination works well for me.

 

[rescueme]

Also on the "Income vs. Expenses" annual graph (if you have it turned on to display on your primary page, as I do) can also throw you.

The bars for income/expense for the same month, prior year may change every time you log on. That's because it dosen't tally the entire month for the previous year, but goes day by day.

You will see a normal chart on the first of the month, but as the month goes on, the chart bars for a year ago will slowly go down and you may assume you spent little, a year ago.

Just another Quicken Quirk...