02 March 2008

Learning Quicken 2008

I finally finished reading the book Quicken 2008: The Missing Manual. I've been using Quicken for the past few years, but not very well. I decided to get a book to understand what I'm doing. Here are some important things I learned.
  • If you withdraw money from an ATM or pay your credit card, these transactions need to be marked transfers. Otherwise Quicken will think that your credit card payment is an expense. In these transactions, the money is staying inside your accounts, not going to an external institution, so these transactions should be transfers.
  • Set up a cash account for incidental cash expenses. Whenever you withdraw money from an ATM, enter a transfer transaction between your checking account and cash account.
  • I can download all my transactions with One Step Update! This marvelous Quicken feature allows you to click a button and have the program automatically download all recent transactions to your accounts. For me, this includes my bank, online savings accounts, credit cards, and investments at Vanguard. I used to manually download transactions from institution websites.
  • The book recommends *not* clicking on the "Accept All" transactions button. You should check that the transaction is valid by matching it against written records/receipts. I now keep receipts (for purchases, ATM withdrawals, checking account deposits, etc) in an envelope on my desk.
  • If you buy something that you will be reimbursed for later, mark the transaction as being in the category "Reimbursement." You can later mark the reimbursing check as being in the category "Reimbursement" as well. You can also setup a Quicken alert reminding you to check if you've been reimbursed.
  • You can save attachments and associate them with transactions or accounts in Quicken. For instance, you can save your credit card statements as .pdfs and associate them with the appropriate credit card account.
  • New to Quicken 2008: You can tag transactions. This is great because a transaction can have more than one tag, whereas it can only have one category.
  • You can use Quicken's budget function to make budgets. I'm still playing with this function. My expenses vary wildly from month to month because I have a $5000+ expense that comes twice a year.

Not to make things sound perfectly peachy, I did run into a few problems. I couldn't get two of my credit card accounts to update using One Step Update. I had to delete the accounts, go to the credit card websites and download transactions manually. Then in the process of downloading, Quicken asked me to create the appropriate credit card account. When I created the credit card account in this manner (rather than using the File -> New command), the update worked properly.

Also, some of my investment accounts were inaccurate because Vanguard only allows you to download the last 18 months of transactions. For my accounts that were older than 18 months, there was a placeholder transaction which simply says "you had x shares of mutual fund y on z date." There's no pricing information so Quicken can't properly calculate how much money you invested. I had to enter about 60 transactions manually to make my investment accounts accurate and up-to-date.

I found Quicken 2008: The Missing Manual a very instructive book and recommend it highly.

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