Creating a Budget (Mac)

Time To Read 6 MIN READ

One of the most useful Quicken for the Mac features is the ability to create a budget. A budget is, essentially, a plan for your money. Having a budget allows you to designate the amounts you plan to spend in individual categories from food, to utilities, rent, entertainment, and so on. You can then track your spending to see if you stayed within budget for each category and either adjust your spending or your budgeted amount based on your actual spending. For example, you may designate three hundred dollars a month to various entertainment categories and then find that you are regularly spending more or less than that amount. You can then adjust your budget.

There are many benefits to having a budget. A budget helps you:

  • Control your spending
  • Keep track of your financial goals
  • Avoid unexpected shortfalls
  • Give you a sense of control over your money

This can help you better manage your cash flow and maximize how much you save.

Cash flow is the measurement of how much money is going into and out of your accounts.

Your budget in Quicken

You will find Quicken’s budget features under the Budget tab. If you’ve never created a budget in Quicken before, there will be a handy Start Budgeting button you can select to create your first budget. You can also create a new budget by clicking the down arrow on the Budget tab and selecting New Budget. You can then follow the steps below to create your budget.

Naming your budget

You will be prompted to name your budget. You need to choose a budget name because Quicken has the ability to maintain multiple budgets. While most people only need one budget, a second budget can be useful if you are tracking accounts for different purposes. For example, you might budget separately for business accounts, or if you maintain an account for someone else such as a relative.

Choosing a budget start date

When you create a budget in Quicken for the Mac, you can decide what date you want to start your budget at. In most cases you will want to start at the beginning of the year. Even if you are several months into the year, this allows Quicken to set a baseline budget by looking at your past spending, and allows you to compare your current spending with your previous spending that year. Other dates are possible, and if you are new to Quicken, you should check to see how back your transactions go so you don’t start your budget before you have any transactions.

Budget creation

Quicken for the Mac analyzes your current spending and income, then generates a budget. The application will choose your categories and your spending amounts. Once Quicken for the Mac has generated the initial budget, your can make adjustments. You can increase or decrease amounts, and you can add or remove categories. When Quicken generates a budget, it is based on your actual spending. If you are trying to reduce your spending, then you’ll want to look for categories where you can lower the amount allocated.

Quicken selects your budget categories based on the categories you have previously assigned to transactions. If you have never used a category, Quicken will not add it to your budget. This is one reason why it is important to always assign categories to your transactions.

You will want to go through all of the spending categories. You might adjust amounts based on your current spending, or pick a goal amount to either decrease or increase the amount of money you put toward an individual category. For example, if your goal is to spend less money eating at restaurants, you might choose to lower the budget for Restaurants, but also raise the budget for Groceries. Some budget items are easy to set. For example, your Auto Insurance, Student Loan, Rent, or Mortgage may not fluctuate from month to month. Other bills, such as Utilities, may be relatively steady, but still have some fluctuation from month to month. Many categories are discretionary, such as Restaurants, Entertainment, and Personal Care. These are areas where you will need to think about what you what you want to spend.

Discretionary spending is defined as non-essential spending. In other words, money that you can avoid spending and still have a functioning household or business. The money you spend on Entertainment is discretionary, for example. Food & Dining can also count as discretionary, because while you need to spend some money on food, the amount you budget is up to you. Just because spending is discretionary does not mean it is bad, but if you are having budget shortfalls or just want to save more money, discretionary spending is a good area to focus on.

Budget Review

To make the best use of your budget, you should review it regularly. Best practice is to look at you budget weekly or even daily to see how you are progressing. At minimum, you should review your budget at the end of each month. When you review a budget, check to see how your actual spending reflects your budgeting. You should also check to be sure you are including all of your spending categories. If you have added a transaction to Quicken under a category you are not tracking, it will not be included in your budget.

Edit budget amounts

You will want to change budget amounts, especially as you grow used to working within a budget. You’ll find that some categories require less money, and others increase over time. To change a budget amount, select Edit Budget. You will see a display of your budget by month. You can select any amount in any month and make the change. When you change an amount, Quicken for Mac will automatically present you with a list of options for applying that amount to other months.

Manage budget categories

As you spend more time with Quicken, you’ll probably want to adjust the categories you use. For example, you might realize you have been spending money in an area but not tracking it, or tracking it under the wrong category. You might also encounter new expenses, such as Parking or Public Transportation, that come with a change in job or residence. To change the categories you are tracking select Edit Budget > Select Categories to bring up the list of categories.

Choose the accounts to use in your budget

Most people will want to use all of their accounts when creating a budget, but in some cases you may want to exclude certain accounts. For example, you might want to track a business account separately from your personal accounts. To choose the accounts you want to use or exclude, select Edit Budget > Select Accounts > Selected accounts. Remove the check box from any account you don’t want to use in your budget.