unofficial microsoft.public.money FAQ and A
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Q) How can I transfer money (to / from) the loan I (made / borrowed)?
A) Money doesn't provide any way in the Loan Account Setup genie to account for money transferred into a loan you are making or from a loan you are taking. Since one typically is funding a loan from another account when you are lending money or transferring the money into some account or transaction (a car purchase, say), this seems a fairly fundamental omission.
If you can live with this, the easiest thing to do is just enter an expense or income transaction with some unique category ("Other Income : Loan Proceeds Received") or no category at all. You can enter a memo in this transaction making clear what you were doing and why and referencing the Loan Accounts involved.
An alternate way to account for the principal received follows a more elaborate technique outlined by Chris Cowles: setup a loan account with no balance but using the appropriate information for all else and letting Money calculate the ($0) payment. Then you enter a "Principal Transfer" of the balance in the loan account register to the settlement account. (You will have to type "principal transfer" as the drop-/pull-downs will not offer it.) Tomorrow (or roll the clock forward by a day for a moment--Money refuses to let you do this any other way), you can go to the loan Details and select Change Loan Terms and go in and set the balance. This will cause the account details to show the amount as $0, but the balance will be correct after the transfer. The interest charged may be off by a day's worth; I have not checked this.
Q) How do I 'mark' money in an account for future use so I don't spend it now?
A) Lots of people want to do this with some mechanism like the accounts-within-an-account "subaccounts" mechanism that Quicken provides. Money provides no similar mechanism. Money, instead, provides tools to manage budget--what you plan to spend when for what--separately from cash flow--managing the amount of cash available to execute the budget. Many of us prefer the latter approach since it leaves behavior modification--not spending money just because you have a positive balance--up to us rather than resorting to subterfuge to "fake ourselves out" by "cookie jar accounting." YMMV.
When a poster said that he was looking for a "cookie jar" mechanism since lack of one meant the money "has to show in the checking account because it is there, but I don't want to think the money is mine by seeing it in the balance," David Brownridge put it very well:
"The way I deal with that is to leave the money in the cheque acct, and in Bills & Deposits create a Bill (with frequency Only Once) and the appropriate future date. Until that "bill" is paid the money will show in the balance of the account; but if you look at the forecast for the account you'll see where it gets withdrawn.
"The important point is that in terms of 'think what money is mine' I never just look at the balances in the accounts list; rather I check out the cashflow forecasts."
Q) How do I budget an expected wage increase without changing my scheduled paycheck?
A) Go into the Budget Planner, Edit the budget, go to the category in question, Edit the "Other income for [category in question]" line and tell Budget Planner about the amounts it isn't figuring out from history/scheduled transactions. Here you'd just want to add the difference amounts since the basic amount should get picked up from your scheduled paycheck transaction.
Q) How do I create different payee information for two accounts with the same payee?
A) You can create two different versions of the same Payee by putting qualifiers after the name in curly braces. E.g., "Mondo Bank {his}" and "Mondo Bank {hers}". The information in the braces and the braces themselves will not print on checks or matter much of anywhere else except where it counts--you can enter transactions to the same payee and have different underlying Payee information in Money.
You can also use curly braces around information in memo fields if you don't want certain information in your memo to print on your checks. Cool, eh?
Q) How do I handle employer reimbursable expenses?
A) There are a few ways to treat employer reimbursables. Some people prefer creating a cash account (entitled "Reimbursed Expenses" or similar). Treat expenses to be reimbursed as transfers in from the account used to pay for the expense, and treat reimbursements as transfers from this account to the account destined to receive the reimbursement.
Another way would be to use an expense category (entitled "Job-Related Expenses:Reimbursable" or similar). Treat expenses to be reimbursed as debits against the category, and treat reimbursements as credits against the category. Depending on your Tools|Options setting, Money may complain about using an expense category for what is an income transaction, You can tell Money this is what you intend. In addition, if your taxing authority allows for the deduction/treatment of unreimbursed employee expenses (as in the United States), be sure to associate the expense category to the proper tax form/line. This way, any monies not reimbursed will appear as an outstanding balance in tax-related reports/calculations.
Thanks to Derrick Cole for this answer.
Q) How do I treat my income tax refund/bill for the prior year?
A) There are several different ways to treat this.
Probably the "best" way to handle this with the least side effects is one suggested by Chris Cowles: If you don't already have one, create a "bank" account (it doesn't have to be associated with any bank) for money owed to you. Flag it as a 'budget' account on the details page. Record a transaction increasing (or decreasing) the balance on that account, categorized to your income tax expense category, dated 12/31/[tax year in question]. That adjusts your income tax expenses to reflect reality. When you get the refund, record the deposit as a transfer to checking from the asset account. Alternately, when you pay the bill, record this as a transfer from checking to the asset account, payable to the taxman or woman, as you prefer. Either way, this transaction is budget-neutral.
You can also use/create categories for this that are flagged to not be included in tax reporting (federal prior year due or refunded) or are flagged to be included (state prior year due or refunded). These would be categories like Taxes:Federal Income Tax (prior year) or Taxes:State Income Tax (prior year). This has the downside of artificially reducing or increasing your tax expenses in the tax year in question. This can have budget planner complications.
Q) How do I treat taxable fringe benefits (imputed income)?
A) Imputed income is the tax accountants' term for income (typically in the form of an employer paid benefit) that the tax law says you owe tax on even though you never got any money. (This stuff gets reported in box 12 of form W-2. The cost of life insurance over $50k is reported as code C.)
Here's how I handle this income in Money--it seems to work and doesn't bollocks up the tax estimator:
On the wages tab of my paycheck:
Wages & Salary:Imputed Income $x (I created this category)
On the deductions after taxes tab:
Insurance:Life $x
Q) How do other users account for ATM withdrawals?
A) Many users setup a dedicated cash account, I call mine "Pocket Change". Transfer the money to the cash account, enter cash transactions in the cash account, and balance it occasionally against the amount of cash you have on hand, entering either an adjustment income (Other Income:Found Money) or expense (Miscellaneous:[unassigned]) transaction to get back in sync vs. the amount of money in your pocket. You don't have to record everything. Just record the things you remember or care about or have receipts for or whatever. If the amount you are writing off seems to be getting out of hand, you can track more closely. If it's getting to be a pain, track less closely and write off more.
If this is too much of a hassle or if your cash spending is sufficiently small/rare as to not be worth worrying about, you can just use splits to account for it. Say you get $50 from the ATM, spend $40 of tickets to the ball game and pocket the $10 to spend over the next week or two. You can split a withdrawal of $50 into $40 for Leisure:Sporting Events and $10 for Miscellaneous:[unassigned].
Q) I don't want to send the whole amount of my phone bill this month, but how do I categorize the whole expense?
A) (This question suggests a new FAQ section: Credit Counseling.)
Assuming that an Account for this payee is not appropriate (see "When should I create an Account instead of a Payee? Aren't Payees just Accounts? Or is my Payee really a Category?"), one way to treat this is to enter a split transaction with the total amount of what you are going to pay them and splits with the entire expense categorized and then some negative number against some Income category like "Other Income:Screw 'em, they'll get it later" or similar for the amount you aren't paying. When they catch up with you and you pay them this amount, do another split in the total amount you are going to pay them and the splits are the expense of the amount you are paying them that hasn't been expensed before, and the next split entry is a positive amount against the Income category "Other Income:Screw 'em, they'll get it later" in the amount you are going to cough up. Money will complain that you are entering an expense against an income category--tell it to get over it. Once they get all their money from you, the total income against "Other Income:Screw 'em, they'll get it later" will fall to $0.
If you need to do this with several payees simultaneously and want to keep track of the separate unpaid balances due, probably the only good choice is to temporarily create liability accounts for each unpaid balance. The basic steps here would be to create the liability account(s), record the expenses and the addition to the liability in a split transaction when you pay the partial amount, and then pay down the liability with transfers. Example transactions with a newly created liability account--created with $0 starting balance--named "Unpaid Phone Co Balance":
First transaction total $10 (paid amount), split #1: $45 Utilities:Telephone, split #2: ($35) Transfer:Unpaid Phone Co Balance
Nth transaction (paying it off): total $65 (paid amount, split #1: $45 Utilities Telephone, split #2 $20 Transfer:Unpaid Phone Co Balance
When you get the liability account balance back down to $0, you can just close the liability account.
Q) I entered a transaction for something I bought. Now I returned the thing for credit. How do I enter that?
A) This question also comes up in other contexts like "I bought lunch for a friend on my credit card last week; he paid me in cash today. How do I deal with that?" The concern in these cases is generally that the amount of spending in the original category may get distorted for reporting and budget purposes.
The best way to treat this is to put in another transaction against the same expense category you used originally but make it a deposit or a credit amount, as appropriate to the account type. Depending on the setting of Tools|Options|Categories|Require the correct type of category for each transaction, Money may issue a warning about using an expense category for an income. You can tell it that you know what you are doing and it will let you do it. (This setting is at Tools|Settings in M05.)
Some reports, e.g., Spending by Category, may require customization to include both debits and credits against the expense category for this to show up.
Thanks to John Buschman for pointing out that this FAQ should be in the UFAQ.
Q) I get a pay advance on the 15th and a full paycheck less the advance at the end of the month. How do I track this in Money?
A) The best bet here is to use a paycheck on the 15th that just has one entry on the after tax tab of "negative" after tax expenses in the amount of the check, expensed against some category like Other Income:Advance Pay. Then, on the alternate paycheck, after taxes tab, have an exactly equal but positive amount against the same category. Thus, these two net to $0. Money tracks everything else off the entries on the end-of-month complete stub. The after tax tab is to keep Money Tax Estimator happy. When entering an expense against an income item, Money may complain depending on your Tools|Options settings. Tell it to get over it.
An alternate method that should work, pointed out by Artie, is to put the advance in as a positive Wage & Salary:Gross Pay (or similar) on the Wages tab and then reduce the amount of the same category on the final paycheck transaction by the advance amount. This may be the best approach depending on how the stubs depict all of this and how much math/lookup you want to do by hand. You have to be very careful what you do with the first entry on the Wages tab of a paycheck as it holds special significance to Tax Estimator. However you set it up; if you use Tex Estimator, check to make sure that the results you are getting are sane.
Q) I paid the phone bill, but my roommate owes me half of it. How do I track that in Money?
A) There are two basic approaches to this. Which you pick depends on how frequent this requirement is and how carefully you want to track this obligation--i.e., is the roommate really all that trustworthy.
The first approach: Pay the Utilities:Phone bill. Then record some Utilities:Phone income when your roommate reimburses his share. Depending on your settings, Money will whine about an income categorized as an expense. Tell it that this is really what you want to do.
The second approach: Create a cash account to track your roommate's balance. Pay the Utilities:Phone bill. Add a second transaction for the same category depositing half the amount into your roommate's balance account. (This is a receivable--an asset--so it is a deposit here. Using the same category effectively reduces your spending in this category.) When your roommate pays her share, transfer the amount from the roommate's balance account to whatever account you deposit it in. Whatever the positive balance of that account is what she still owes you.
Q) I'm distributing my 401(k)/withdrawing from my IRA--how do I categorize the transfer as income?
A) The question frames the issue. This transfer from a tax-deferred Investment account to a Cash Account is not Income in the accounting sense. It's already your money. You didn't get richer by moving it from the tax-deferred account to the cash account. Thus, in the accounting sense favored by Money, Transfer is correct and categorizing it as Income isn't correct. But the problem is that the IRS treats money coming out of the tax-deferred accounts as taxable earned income. (Even that is a muddled picture. If the principal includes after-tax contributions, then not all of the distribution/withdrawal is treated for tax purposes as taxable earned income.)
While the Tax Estimator in Money is smart enough to ignore various earnings in the accounts set as tax-deferred, it isn't smart enough to deal with distributions/withdrawals from these accounts. (The before/after tax contributions problem may be one of the reasons they've elected to "not go there.")
So how do you get Tax Estimator and the tax reporting to deal with your distribution/withdrawal?
There are a number of possible ways, each of them imperfect. Possibilities include:
You can use some tool besides Money to manage the tax estimating. Excel is frequently a handy tool to have around to solve things Money can't.
You can enter the income in Tax Estimator by hand. You can do this buy going into Tax Estimator, on the Income page. click on the Wages income link, and then use the option to add additional income that's not in your Money file.
If you do not have an Investment Cash Account associated with the Investment Account that you are selling down, your choice is probably limited to the "two transaction" method posted by Cal Learner--MVP. This is doing the Sell transaction with no Transfer To account for the proceeds in one transaction and doing an Income transaction, for the same amount, in the cash account receiving the funds. One downside to this is that the transactions are not joined in any logical way in Money, only in your head.
You can use the "unassigned split" option posted by Michael Gordon. Here you to have the Transfer from the Investment Cash Account be part of a split with a similar amount categorized as some Income Category that is set to work and play well with the Tax Estimator, etc. The split is unbalanced--the elements don't add up to the transaction net--to keep from "creating" money. Say the transferred amount is $2,000; the split would have the $2,000 transfer and $2,000 of income--adding up to $4,000, not the $2,000 desired total for the transaction. You'd tell Money you know there is unassigned income in the split and you really want to do it that way when it complains.
If the unassigned split offends your sense of precision, a variant of this is to add a separate expense to balance the transaction against some made-up expense category, say Miscellaneous : Tax-Deferred Income Offset.
Jeff M suggested an interesting alternative to these last two: use a Paycheck transaction. In this case, you'd probably have to enter the Paycheck in the account that you are transferring the money to. (The umpmfaq has not tested this to see which works best with Tax Estimator.) The Paycheck would have some income on the wages tab, the after-tax tab would have a Transfer from--in a negative amount--the Investment Cash Account. You could either save the transaction with unassigned income or have the bogus offsetting expense category. This method might also prove valuable for 401(k) distributions, since these distributions are typically required to have taxes withheld. This tax withholding could be entered directly in the Paycheck transaction. Likewise, using a Paycheck would provide a ready model for separating the before taxed income portion of a distribution and the after-tax, i.e., already taxed, portion.
Q) I've been lazy and haven't balanced in months. How do I catch up?
A) If you wish to start fresh and declare an account balanced, you can mark all entries balanced. Select the register view to show only unreconciled transactions, sort by date, and go to the oldest transaction. Hold down Cntl+Shift+M and let auto-repeat work through the transactions until none are left showing. Then balance, making the starting and ending balance match the known balance. Choose the balance date to be the day after your last transaction. This is not the normal procedure; it just starts you with an amnesty for former balancing.
Thereafter, follow the normal procedure. Look at the balancing movie clip from your Money disk.
Answer courtesy of Cal Learner--MVP.
Q) Money won't let me make a Loan Payment from my Paycheck. Why not? What do I do?
A) A paycheck is a specialized instance of the generalized form of split transaction. A loan payment is a specialized instance of the generalized form of split transaction. In Money, a transaction that is a split of another transaction cannot itself be split. Thus, a loan payment cannot be made from a paycheck.
The general way to accomplish this is in two transactions via a holding account. E.g., transfer the payment amount to the associated Asset Account in the Paycheck and then schedule the Loan Payment to be made from the Asset Account. Yes, it creates a bunch of silly looking paired +x Transfer, -x Loan Payment Transactions in the Asset Account. But there is no other way to record it in Money.
There is an MSKB article with more detail on doing this; the reference is courtesy of Kimberly Renna, Microsoft MVP - Consumer Products.
References:
MSKB: Q148280 Loan payments from paycheck
Q) My wife and I have two accounts at the same bank with different passwords. How do I enter two passwords in Money?
A) This answer used to point to an MSKB item that has since been "disappeared" from the Microsoft Support site. (Thanks to Jon Anderson for pointing this out.) The old method was to define a new FI with a slightly different name ("First Galactic Bank of the Milky Way {his}" and "First Galactic Bank of the Milky Way {hers}") so that you can still have one user name/password associated with each FI. Now that Money tries to make you use FIs they define, so that the whole Yodlee thing will work, this probably doesn't work. What does work is still an open question. If anybody figures it out, let me know and I'll update this answer.
Q) Why don't my transfers to savings show up under some category in my budget?
A) Transfers do not have an income or expense category because they are net worth neutral. Expenses make you poorer, Income makes you richer; Transfers do neither.
For this reason, Transfers between accounts that are included in the Budget Planner (see the account details for information) will NOT show up in your budget. Only by excluding the savings account from the Budget Planner will you see the scheduled transfer (and then only grouped under the "Transfers out of budget accounts" Budget Group.
Answer derived from one provided by Derrick Cole
Please see this disclaimer if you are using Money 2005 or this comment if you are using Money 2006.
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Last update: 10 December 2006 |
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