"Dick Watson" <littlegreengecko[at]mind-enufalready-spring.com> wrote in message news:%23reMJzyvIHA.3792[at]TK2MSFTNGP02.phx.gbl...

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S&S budget doesn't allow predictive modeling, that I recall, and definitely doesn't use the CFC as well as Advanced budget does.
--
Chris Cowles
Gainesville, FL

"Dick Watson" <littlegreengecko[at]mind-enufalready-spring.com> wrote in
message news:%23reMJzyvIHA.3792[at]TK2MSFTNGP02.phx.gbl...
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I'd add a 'me too' to Dick's statement that the 90 day forecast is pretty
good. The thing that takes the most effort in setting up Money is to have
the patience for a long while (maybe 2 years) to really see all the spending
that you are doing. Two years puts you through two typical cycles of
expense you just cannot think of when you first set up Money. For example a
house insurance payment of once per year, real estate taxes of perhaps 2x
per year, annual payments of magazine subscriptions, or perhaps a AAA club
memebership, etc. The main thing is to get all those things in your Bill
Summary. Also things like tax refunds, or perhaps an annual bonus paid by
your employer, etc.

The other thing is when you see that 90 day window now you will be seeing
things far enough out to take action. Also you must think ahead on things.
For example when I knew we would get a tax rebate (the stimulus) I went
ahead and put that into the scheduled Bills & Deposits as a deposit. then I
planned a scheduled transfer into savings. Now recently I had a new roof
put onto the house with a six months same as cash. I'll put in the payment
of that to the loan company (I intend to pay in full) and since the money s
coming from savings I have accumulated I'll put in a transfer into my
checking account, then the single check payment to the loan company to pay
it off. There will be a spike in the cash flow graph but at least it's
planned out.

The best thing is this prevent you from overlooking a payment to somebody
and avoiding a late charge, etc.

Mark


PS - these comments below of Dick's are useful too the main thing is don't
stop trying and keep refining your bills and deposits to include everything.


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Comments inline.

"drokkon" <drokkon[at]live.com> wrote in message
news:B4CEE8C8-A5CF-4217-B925-CF846706FE20[at]microsoft.com...
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Don't know what their plans are for sure. Outward signs are not encouraging.
Only time will tell.

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By the reviewers who take ad dollars. Maybe even by users who've tried both.
Many users who've tried both prefer M. By all accounts I've seen, by sales,
it isn't even close. There was a link in the M+ page to one account of
market share.

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The reviewers trade off this prize.

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Money came out in '92 or so. Quicken for DOS had already been there for
quite some time and a Windows version was either just out or on the horizon.
(Can't remember the exact chronology here.) By the late '90s MS decided the
only way to catch Intuit (Quicken) was to buy them. The government said no.
Along the way in several of those early years they essentially gave Money
away. I suspect they've measured ROI vs. I vs. market share and concluded
that no amount of I will catch up and they would just suffer huge losses
along the way. And if the really did that, Intuit would whine to the
government like a stuck pig that Microsoft was being predatory.

The issue is really that the market for these kinds of apps isn't growing
much and there is a huge barrier to switching.

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I'm not sure they are doing this as much as they used to. Don't really have
any good data one way or the other. But if they really are 100% filling the
new OEM machines in the home user channel with MEss, that still doesn't bode
well for the > MEss editions. Say even 10% of the buyers of these machines
start using MEss. If they like what they see, then most new adopters are
adopting the least capable, most de-featured edition.

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....

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Sounds like you've found the tool...

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Not sure why they'd be different. Budget tells you that a given level of
income and expense is sustainable and lets you track that you are performing
to plan within those boundaries. FCF tells you that whether the budgeted
items plus the scheduled items plus the trended items call for more or less
cash than you have available going forward.

In my case, I don't let FCF show trended or budgeted items. I have most
everything that can be scheduled scheduled. (Even an average weekly amount
of cash from the ATM is scheduled--these rarely get entered as scheduled
because we don't go to the ATM weekly. But the average predicts cash flow
reasonably well over time.) Most everything that can't be scheduled (e.g.,
Food : Groceries) we use a CC for--and we pay balance when due. To
accommodate this in FCF, I have the transfer to the CC scheduled and set to
either an average value I like or let Money compute a "last 12 payments"
average. (I used to use an average number I liked and would edit a series
member of the transfers to allow for months that I knew were going to be way
off the average as soon as I knew it. My average scheduled transfer was
lower but it was more work to accommodate the off-scale-high months. For the
past year or so I've tried just using Money's 12-payment moving average in
the scheduled CC transfer. The average it is calculating is much higher
because of the occasional off-scale-high months pulling it up. And since I
try to keep the FCF projected balance above $0 my average checking balance
has probably gone up. But the need to dip into the cash cushion is reduced
correspondingly and the need to edit members of the series from month to
month is gone. Can't say which scheme I like better.) I leave FCF set to
show the next 90 days of the checking account and have added the Cash Flow
widget to the home page. The scheduled items pretty much predict what the
balance will do.

That's what I do and I find the 90 day cash flow predictions are pretty
accurate. (If I have a huge unscheduled expense show up, it can be an issue.
I try to keep a decent cash cushion in an MMF to abate this risk. But such
an expense would likely have been unbudgeted as well, so the basic premise
that these two tools are complementary still holds.)

Others are not necessarily successful using FCF as I do. One reason I'm
successful at it is lots of experience and a pretty extensive data set to
draw from. I've been using this kind of an approach since I did it on a
programmable calculator. Then 123. Then Excel. Money since '93.

I don't pay much attention to the budget any more. Our spending patterns are
fairly well established by now and we have a decent savings rate. Whenever I
pay much attention to budget it just tells me things like my spending on
Automobile : Gasoline are off-scale high. Thanks. I needed to be told that.
Duh.

Again, there is no One Right Answer. Find a way that works for you. We can
only expose you to tools and techniques.

I read through much of your FAQ today, and was saddened to read your Money
Plus "review," especially your references to its demise (which you've again
referenced here). I'm really confused, as until 2008, Money and Quicken are
rated neck-and-neck. The 2008 reviews gave the edge to Quicken, but really
only because of a revamped UI. I've always been an MS fanboy, more or less,
and remember convincing my Dad to migrate from TurboTax to TaxCut so I could
get Microsoft Money years ago. If they were willing to throw some effort
into this, I don't see why it couldn't dominate this market. Plus, if
they're throwing Money Essentials onto every OEM PC they can, I can't
imagine they're giving up the project. But I'll defer to you!

Back to credit cards, I'm trying to wrap my head around one last thing:

If I'm budgeting using categories, and both my checking and credit card
accounts are included in the budget, then I can see how "paying" a credit
card bill is nothing more than "transferring" funds from an asset to a
liability. You've mentioned that my credit card payment wouldn't fit into a
budget at all, and I'm finally grasping that. You've mentioned that budgets
give you a good idea of income/expense patterns while monitoring cash flow
is a somewhat different animal. I want to play with you "big dogs" and learn
about the bigger picture by using my budget, but I also think that I need
some kind of "cash flow budget" to simply layout my income, monthly
expenses, and see the leftover (and that includes my credit card payment).

So do I have to extrapolate a cash flow model from my budget using my
noggin', or is there a separate tool for cash flow? (The only cash flow tool
I can find is pretty much automated and creates a graph for me.) Or should I
set up a "simple budget" for my cash flow and switch between the two?

I sincerely appreciate your patience...

"Dick Watson" <littlegreengecko[at]mind-enufalready-spring.com> wrote in
message news:#BisFAsvIHA.2188[at]TK2MSFTNGP04.phx.gbl...
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There is (or was--haven't looked lately) a "Money for Dummies" book but it
probably doesn't go much into accounting logic. I guess my best short
recommendation is Google Accounting or sticking around here.

As to AdvBud vs. S&S, I think the AdvBud is just a much more granular model.
But it is pretty set in its ways about some things and, for some, kinda
buggy. I do think MS would like to make the AdvBud disappear, but I don't
know that they are more interested in that than in making the app disappear
in general, so if may stay around as long as the app. I don't know that one
is better than the other--having not spent more than ten minutes or so
playing with the S&S. I thought--can't recall why just now--that there was a
straightforward way to stand down from the AdvBud and go back to Essential
or S&S. One good thing to keep in mind is before doing most anything like
leaping from one budget model to another is to do it in a COPY of your data
file until you decide you like the results. Money makes undoing stuff
difficult in certain cases.

Thanks for the feedback. Glad we all can help.

"drokkon" <drokkon[at]live.com> wrote in message
news:0D2B06D2-E8FF-432D-941C-9D6C6DE44B0F[at]microsoft.com...
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Thanks so much for your help. I've been learning from your amazing replies
as brain function allows. Before I pester you with more noobish questions,
however, I have to know: if one needn't be a CPA to use Money, where can I
learn what I need? Perhaps a Dummies book for either personal finance or
Microsoft Money would be a good place to start. I just really want to grasp
the simple concepts you're presenting me with (like how paying a credit card
is "transferring" to another account). If you could point me in the
direction of some good primers, that'd be awesome.

PS - Once you told me about the hidden advanced budget, I had to find it. I
found it, loaded it, and then spent an hour trying to get my S&S budget
back. I could see where it was backed up, but Money refused to switch
between the advanced and S&S budget, and if I did manage to get it switched,
I couldn't LOAD my backup of the S&S budget (the "ok" or "load" button
wouldn't work!). I believe this led to another ok button issue (in my "edit
bill series" window). In short, it was a fiasco!!! Just an FYI, in case
you're thinking about pointing people in that direction again. If you
really think Money will continue to include it, and think it will give me
more control over my budget, then I'll probably try it out again. But I'd
really have to learn what makes it so much better than the S&S budget...

"Dick Watson" <littlegreengecko[at]mind-enufalready-spring.com> wrote in
message news:u7forc3tIHA.552[at]TK2MSFTNGP06.phx.gbl...
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I'm going to try and address all of your replies in this one here. Hopefully
I won't miss any important points.

I think in one regard I may have been under a false impression. Knowing you
are using the S&S Budget, I am wondering if "Net Contributions" is that
budget model's way of helping assure that Expense + "involuntary cash flow"
is depicted as less than Income? The Advanced Budget model (since M06, it
could also be known as The More Complex Budget Model That's Been Hidden From
Users So They Will Not Call Support When They Find Things About It That They
Don't Like) tries to do something similar. I think it's a way to avoid users
getting the impression that they can spend until Expenses = Income when debt
service prevents it. I've never messed much with S&S Budget. I had been
thinking that Net Contributions was something along the lines of Bill
Payment : Credit Card in the register model where there are no real
Transfers. (This is MEss, for instance. Or the model where you answer the
question about wanting to keep track on transactions no when creating a
Credit Card Account.)

At any rate, whether it is double counting the current expense or not I
can't say from a position of knowledge. You might want to do some analysis
yourself by trying to figure out where they are putting the current expenses
on the credit card vs. where they are putting the necessary transfers to
cover the principal. For test purposes, you can get some insight into how
they model things with BIG temporary entries. Like set the starting balance
of the card +$100,000, or enter a $100,000 expense, to see how the budget
changes. Perhaps other S&S Budget users more familiar with how it operates
will jump in here as well. (Few of the regulars use S&S since we've been
budgeting in Money since long before they decided we needed the S&S and hid
AdvBudget. Money users used to be a LOT easier to help before Microsoft
balkanized the product with all of the dumbed-down editions and modes.) If I
were designing it, I might think of having to account for the amount of
money transferred to the liability less the new expenses added to the
liability (including its Interest Expense) as something like "Net
Contribution"--though I would never call it a contribution for purposes of a
budget model. Basically this kind of Net Contribution accounts for
past--before the budget--sins.

So, net all of that, the goal of budgeting in the long term is to make sure
your Income exceeds your Expenses. In the long term this difference is
savings. In the short term, you have to account for those items that are
essentially debt service to make sure that the user doesn't think that these
savings can be spent because they must be used to offset prior periods where
there was no savings and debt was accumulating. You probably need to do some
analysis to validate that the budget model you are using, as you've stuffed
it with data, is meeting that objective.

Transfer : [name of credit card account] and Credit Card Payment : [name of
credit card account] are 99.9% identical. The latter was added, I think,
because lots of people couldn't understand the more normative "Transfer".
The only difference in behavior I can see is what they call it in the
account register the money is leaving. They call both Transfer : [name of
account sending the money] in the Credit Card account. I recommend the more
normative Transfer.

That is distinct from The Category That Should Be Deleted Immediately And
Without Further Ado: the Expense Category "Credit Card Payments /
Transfers". That one is just stupid and designed to cause confusion and
heartache to anybody trying to have any degree of rigor in their accounting.

As to a credit card debt--any revolving debt--that you are just paying down
and not adding to with new expenses besides the cost of money: you still
probably shouldn't try to treat this as a Loan Account. Loan Accounts are
intended for non-revolving debt like normal car loans and home mortgages and
so forth.

To the bottom line: if you can validate the S&S Budget's results, it will
surely help you see if a given amount of rent plus your other planned
expenses plus the amount of "negative savings" you have every month to cover
the debt from before you were budgeting leaves you in the black.

This problem can also be approximated with the Forecast Cash Flow (hereafter
FCF). In my case, I have the FCF set to not show trended or budgeted amounts
in its settings. But what I do have is Bills & Deposits scheduled for most
everything. Since all of our income and expenses channel through one cash
account and two credit cards, I just track the balance of the one cash
account. To account for spending on the credit cards, I schedule estimated
Transfers from the cash account based on what I believe our monthly spending
on the cards to be likely to be. (Long historic data helps here. Plus I have
LOTS of regular bills--sat tv, cell phone, landline phone, etc--channel
through the credit card and they are all scheduled. The guesstimate each
month is stuff like Food : Groceries.)

The 90-day FCF chart for the cash account does a pretty good job of telling
me whether we are accumulating or depleting cash. And it usually is pretty
accurate barring unforeseen expenses. Keeping this biased toward
accumulating for more than twenty years has enabled us to get in a position
where we have a sufficient cash cushion to swallow most of the unforeseen
expenses and lose some income--interest forgone--but not add
expenses--interest charges to rent the money.

Glad I could help. Thanks for the feedback. When you get ready to start
tracking investments, you know where to find us.

"drokkon" <drokkon[at]live.com> wrote in message
news:A8A28F36-5082-41D9-987B-4BCC4439943B[at]microsoft.com...
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Stop the presses. Do you maintain that site you linked to? 'Cause wow.
Bookmarked.

That really answers a lot of my questions, and makes me realize that I've
got an awful lot to learn.

"You've taken your first step into a larger world."

I was confused because I'm really just paying off my credit card - not using
it. As such, since the only "expense" incurred on the account every month is
the service charge, I was thinking of it as a loan account.

As I'm continue to try to wrapping my head around this, what do you
recommend? Obviously the "budget" goes beyond the scope I thought it did.
I'd like to explore its potential, but I also need something simpler that
measures my monthly cashflow. Like the paper budget I learned so long ago:
gross less taxes equals net, less expenses equals savings. For example, I
was looking for an apartment this month, relying on Money to do the simple
math to let me know how much rent I could afford. (I know, I know - buy and
build equity. Especially in this market. I'm workin' on it!)

I'm gonna be a mess when I start trying to measure my investments...

"drokkon" <drokkon[at]live.com> wrote in message
news:O9DbgLwtIHA.4528[at]TK2MSFTNGP03.phx.gbl...
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FYI: I've changed my credit card payments to the "transfer" category instead
of the "credit card payment" category (mildly annoying - why do they HAVE a
credit card payment category?!? How does it behave differently? ).

Anyway, after doing that, I still don't have "Transfers to: My Credit Card"
under my budget categories. Only "Net contributions to: My Credit Card." And
we all know the "problem" I'm having with that.

Hmmm...

"drokkon" <drokkon[at]live.com> wrote in message
news:A8A28F36-5082-41D9-987B-4BCC4439943B[at]microsoft.com...
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You ARE my hero. Thanks so much for the lesson! Indeed, I guess I've been
looking at my budget as a "cash-flow-ometer" instead of a budget. Up until
the credit card "issue," it really was behaving like a simple cash flow
model. I guess I'd like it to serve both needs, but I'll defer to your
further advice.

To help you answer further questions I may have, I'm using Microsoft Money
Plus Deluxe 17.0.120.1415 and I definitely have "advanced" everything turned
on (I've mentioned I'm a perfectionist) I'm using the Savings and Spending
Budget.

Like you said, I have a credit card account that tracks transactions -
directly from my bank. As far as the budget goes, I'm currently using the
"credit card payment: my credit card" category, but you're suggesting I use
"transfer to: my credit card." I'll give it a shot - are you saying that
this will clear up the "net contributions" budget double-dipping problem?
What category should I add to my budget to account for my credit card
payments if I remove "net contribution to: my credit card" category?

So are you on the Microsoft team or do you just like helping people out?
Either way - THANK YOU!


"Dick Watson" <littlegreengecko[at]mind-enufalready-spring.com> wrote in
message news:uWjOrjotIHA.3968[at]TK2MSFTNGP04.phx.gbl...
- quote -

That's a lot of ground to cover. Rather than trying to address all of that,
let's start with some simple theory that should answer the one question you
asked.

Expense occur when you spend money. You spend the money, in the case of a
credit card, when you sign the slip. (Or, when the credit card company bills
interest.)

You budget income and expense. So, you budget for what you spend using the
credit card.

Paying the credit card, on the other hand, is not an expense. It takes money
from an asset--a pile of money--and moves it to a liability--a sinkhole for
money. The net impact to your wealth of this movement is nothing. This is
why you don't budget it. The availability of free cash to send to the credit
card company, on the third hand, is a cash flow problem, not a budget
problem.

Budgeting helps you see if, over the long haul, your pattern of income and
expense is sustainable and whether it is wealth creating or wealth
destroying. Cash Flow looks to see if, over the short haul, you have enough
free cash to send all of the places you want/need to send it. By budgeting
this way, you put the budget emphasis at the point of the decision to
spend--when you whip out the credit card at the Starbucks, not 45 days later
when it's too late as the money's already been spent.

Now, Money has come up with lots of ways over the years to confuse all of
this for new users in the name of trying to make it "easier". And they've
even come up with an edition (Money Essentials or MEss) that completely
masks some of this. So, to better address your specifics, we'd need to know
what version/edition you are using and, depending on that answer, if you are
using a thing called Essential Register or Advanced Register. There are also
now at least three different budget models out there in different versions
and editions. Oh, and at least two ways to setup credit card accounts.

Oh, and re. credit cards, best practice is to setup a Credit Card Account in
Money where you enter all transactions for the cards and use the Transfer :
[name of credit card account] to pay the bills. The Net contributions thing
is one of those ways they tried to make it "easier" but it creates this
problem of accounting for the same expense twice.

See also several of the Q&A at http://umpmfaq.info/faqdb.php?cat=13.

"drokkon" <drokkon[at]live.com> wrote in message
news:ADCD8529-1C54-4B9E-893F-67294F020B9D[at]microsoft.com...

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So I began my Money adventure first by reconciling all of my accounts. Then
I created a budget. Once I had perfected that, I proceeded to actually input
an asset account (my car) and add debt accounts (car loan, student loan,
etc.). Hopefully I'll soon be moving on to such fun things as the "debt
reduction" planner.

Anyway, after adding loan accounts, I changed some categories to better
"connect" my checking account with my debt accounts. For example, I changed
my car loan payments category from a general "automobile: car payment" to a
specific "loan payment: my auto loan." I changed my credit card payments
from "bills: credit card payment" to "credit card payment: my credit card."

I then went to change my budget to reflect these new categories. Everything
went great except for one thing: my credit card account. Under
"add-> expense-> I want to track contributions to a debt account," all of my
loan accounts showed up as "Transfers to: my auto loan," for example. My
credit card, however, only showed up as "Net contributions to: my credit
card."

This is a big deal, because the "net contributions" option includes all
transactions inside my credit card account - and if I'm not mistaken, these
transactions are already accounted for by other budget categories. If I want
to budget for a $100 payment per month towards my card, this category needs
to reflect that I've paid that $100. However, this "net contributions"
category is saying that I'm only paying a fraction of that $100 per month
because it's taking into account the interest charged, the gas I purchased,
etc. Looking into it, I discovered that sure enough, each gas purchase is
already accounted for under the "automobile: gasoline" category under
"committed expenses," and each interest charge is already accounted for
under "bank charges: credit card interest."

Why isn't there simply a "transfers to: my credit card" option for my
budget? If you read through all of this, THANK YOU! If you can help me out,
YOU'RE MY HERO!