Quicken 2009: The Missing Manual

Chapter 11. Monitoring Spending and Saving

The word budget makes most people think of severe spending restrictions, like giving up the little treats that help them get through the day (goodbye, morning lattes!). But a budget is nothing more than a plan for spending and saving your money—and it can even include those lattes. Whether you create your budget in Quicken or on a piece of paper, it can give you a sense of freedom that comes from knowing you have a plan to make ends meet. The only requirement is that your budget works for you. If you come up with a way to spend $5,000 a year on shoes and still save enough for retirement, then your budget’s working.

Quicken has a bunch of features that help you estimate how much money you’ll make, how much money you’ll spend, and from there, how much money is available for saving or investing. Ideally, you base your budget on how much money you want to save, whether your goal is buying a house, having a comfy retirement, or paying for your kid’s college education. With your income and savings goals as the bookends, you can play with the expense categories in your budget until the numbers add up. On the other hand, if you’re a compulsive shopper, your first crack at a budget may reveal that your expenses outweigh your income. Armed with that knowledge, you can focus on scaling back spending—or look for a second job to help pay for all your purchases.

You can create budgets for special purposes, like estimating your annual retirement expenses ...