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When you take the time to categorize your transactions, you're able to easily create Quicken reports that show how much you're spending in particular areas, such as on entertainment, on groceries, or how much you're earning from different sources or across different periods of time. Remember, in Quicken, categories track the source of a deposit such as your paycheck, the reason for an expenditure such as dining out, or the name of an account to which you're transferring funds, such as a savings or a retirement account. It's a good idea to categorize your transactions in your register whether you're adding them by hand or downloading them from your bank.
Let's take a look, at how we categorize transactions from within an account register in Quicken. I'll show you, using Jeannie's Primary Checking account. Start by opening the Account, from the Account bar. If we're entering a transaction for a Fitness Club payment, once we've added the date of the transaction, the check number if applicable, and the payee the next detail we need to add is the category. Click on the empty field, in the Category column, and then click that tiny little square with the down arrow on it and you'll see a smaller pop up version of the category list.
I can scroll down to find the category or I can just start typing to search for the category. I can select the main, Health and Fitness category, if I want to track categories. Then I'll click the bold words Heath and Fitness, and it'll be added. The pop-up disappears and Health and Fitness is entered in the category line. I can click on the next field or the next line to save that category. If I want to select a subcategory as well, all I need to do is click that category field, and I'll select the Gym subcategory underneath the Health and Fitness category.
You'll notice that it enters the category and the subcategory. As Health and Fitness colon Gym, to distinguish the category from the subcategory. If you download your transactions from your bank, Quicken attempts to categorize your transactions for you automatically. Often, Quicken categorizes your transactions correctly but sometimes, Quicken will leave the category blank as in the case of a personal check, or they'll get the category wrong. Such as, in the case of a restaurant name that's not recognized by the Quicken software. It's a good idea to review your downloaded transactions each time you download to make sure they're categorized correctly.
Here's a transaction that was downloaded from Jeannie's bank that was not categorized correctly. It's a clothing store where she made a purchase. The Quicken category is automatically, as a restaurant. I'll click on the current category, Food and Dining, Restaurants. And I'll change the category, to Shopping Clothing. Another way to add the category,once you start to know the categories well, is to start typing the category in the Category field. Quicken will pop up the category list, and select the closest category that matches. I'll show you how to do this with the Health and Fitness category.
I type HE, and Quicken finds the Health and Fitness category. And I can use my mouse to click directly on Health and Fitness and Gym. Let's take a quick look, at how to add an income category. This deposit was downloaded from the bank, but Quicken didn't categorize it. I'm going to click on the Category column for this transaction. I'll click the little down arrow to get to the Category list. I'm going to click on Net Salary, since this is Jeannie's paycheck. I'll click Enter on my keyboard and it'll save. When you're adding a Credit Card category, you have two options.
If you've not added the Credit Card account to Quicken, select the bills and utilities category and select credit card payment. If you have added the credit card account to Quicken, select the Transfer category. And select the name of the Credit Card Account as a subcategory. This will keep your spending report accurate, since the Credit Card payment is not counted in both the credit card account and the checking account. Similarly, if you're transferring money from one account to another, use the Transfer category, and select the account you're transferring money to or from. For instance, if you are transferring money to your Savings Account from your checking account.
Select Transfer and the select the Savings Account. I'll show that since Jeannie is transferring $50, from her checking account to her savings account. I'll select Transfers, and Jeannie's Savings Account. Enter the amount, and click Enter. In the account bar, if you click on Jeannie's Savings, you'll see a new $50 deposit, in the Savings Account register. If you want to save time when you're categorizing transactions, just use the main categories and skip the subcategories for your expenses. You'll still get a great snapshot, of your overall spending in your reports, and the categorization process will be much faster.
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