Creating and Using Spending Categorization (Part 1)

"Let honesty and industry be thy constant companions, and spend one penny less than thy clear gains; then shall thy pocket begin to thrive; creditors will not insult, nor want oppress, nor hungerness bite, nor nakedness freeze thee" - Benjamin Franklin

Building a budget is instrumental to getting control of your finances and having a financial strategy.

I spent a lot of time working on the right categories so that it was actually useful and easy to have a detailed budget while not getting overwhelmed with minutia and monthly variability.

Here are the category groups (note the Categories) I have used to slice and categorize my income and spending.

Note, I created leading characters (“I1” for Income, “P” for Payments). This allows sorting in reports reports (e.g., my salary is listed first). I use these to group together multiple Quicken Categories.

Income Categories
I1 - Salary-Self
I2 - Salary Bonus-ESPP
I2 – Work Reimbursement
I3 - Salary Spouse
I2 – From Goals Saving Short Term
I3 – From Goals Savings Long Term
I3 - Other Income

Expense Categories
P1 – Credit Card Payments
P1 – Loan Payments
P1 – To Goals Savings Long Term
P1 – To Goals Savings Short Term
P2 – Non Discretionary Expenses (Monthly)
P2 – Non Discretionary Expenses (Periodic)
P3 – Discretionary Expenses (Monthly)
P3 – Discretionary Expenses (Periodic)

To see these show up in the Budgeting tool in Quicken: In the budget tool in Quicken 2006, on the budget tab, look for a little check-box that says "Show Category Groups". You can also see category groups when you are creating or editing a category.