How do I create a budget?

Creating a budget in Quicken helps you organize your finances by setting spending limits and tracking your expenses. With a budget, you can allocate funds to specific categories, compare actual spending to your plan, and make adjustments as needed. This guide explains how to create, customize, and manage a budget in Quicken.

Quick steps to create a budget

Follow these steps to set up your budget:

1. Open the budget tool:
   • Go to the Planning tab. If tabs are hidden, enable them via View menu > Show Tabs.
   • Click Budgets.
2. Start your budget:
   • If this is your first budget, click Get Started.
   • To create a new budget, select Budget Actions > Create New Budget.
3. Name your budget: Enter a name to help identify it (e.g., "2024 Budget").
4. Select the year:
   • Budgets default to the current year. Use Advanced Budget Settings to adjust this if needed.
5. Choose categories:
   • Quicken can automatically include recurring categories, or you can select categories manually. Both options allow changes later.
6. Complete setup: Click Next to generate your budget.

Once the budget is created, you can start tracking your spending and make changes as needed.

How Quicken creates your budget

When you create a budget, Quicken uses your transaction history to provide a starting point. The program analyzes prior spending patterns and organizes the data into budget categories.

• Categories included:
  • Recurring personal expense categories (e.g., groceries, utilities).
  • Transfers, income, and special categories like _401Contrib are excluded by default.
• Transaction data used:
  • Quicken looks at transactions from the past 12 months. If less data is available, it uses as few as three months.
• Budgeting method:
  • Quicken uses actual spending for past months and averages for current and future months.
• Rounding: Amounts are rounded to the nearest dollar.
• Accounts included:
  • Quicken includes personal expense transactions but excludes Invoice and Sales Tax accounts (Quicken Home & Business only).

This process gives you a baseline budget that you can customize to better reflect your financial needs.

Customizing your budget

After creating a budget, you can adjust it to better fit your financial situation. Customization allows you to focus on specific spending areas and make updates as your needs change.

Adding or removing categories

1. Click Select Categories to Budget at the bottom of the Budget window.
2. Add categories that are relevant to your spending or remove those that aren’t.

Adjusting amounts

1. Click a category in the Budget window.
2. Enter a new monthly budget amount as needed.

Customizing your budget ensures it aligns with your spending patterns and goals.

Extending your budget to a new year

Quicken can copy your existing budget into a new year. This allows you to maintain consistency while making adjustments for any changes in your expenses or income.

Extending your budget:

1. Use the date control at the top of the Budget window to select the new year.
2. Choose one of the following options:
   • Copy budget categories and values: Retain the same categories and amounts.
   • Copy categories and actuals: Use spending data from the prior year as the new budget values.
   • Copy categories only: Carry over categories without preset amounts.
3. Click OK to create the new budget.

This approach simplifies the process of updating your budget annually.

Advanced budgeting options

Quicken includes features for planning ahead or reviewing past budgets. These tools can help you analyze trends and prepare for future financial changes.

• Planning future budgets: Use the date control to create a budget for an upcoming year before it begins.
• Analyzing past budgets: Create budgets for prior years to examine historical spending patterns.
• Tracking actuals: Budgets automatically reflect income and expense actuals based on transactions for the selected year.

These features provide additional flexibility for organizing your financial data.

Notes about budgeting in Quicken

• Updating budgets: Quicken recalculates budget values automatically based on spending trends.
• Editing budgets: Changes to a current budget won’t affect previous budgets.
• Filtering categories: Use the Customize > Advanced tab to exclude non-budgeted categories.
• Integrating with reports: Budgets can be used to generate detailed financial reports.

Summary

Budgets in Quicken help you organize your expenses and track progress over time. By setting spending limits and comparing actual spending to planned amounts, you can make informed decisions about where to adjust. Creating, customizing, and maintaining a budget is straightforward and helps you stay organized financially.