Setting Up and Using Quicken

Teaching Tool 30A: Quicken 1–Setting Up and Using Quicken

Quicken 2012

Personal Finance: Another Perspective

Introduction

We have put together four different tutorials to help you as you use Quicken in your Personal Finance. The purpose of these tutorials is to help you as you install, download your financial information, set up your income and expense categories, accept your financial data, and prepare your budget, balance sheet, and income statement data. The tutorials are:

TT30A: Quicken 1 – Setting Up and Using Quicken

TT30B: Quicken 2 – Personalizing the Category List

TT30C: Quicken 3 – Setting Up your Budget, and

TT30D: Quicken 4 – Creating Your Financial Statement

TT30E: Quicken 5 – Quicken using Web Connect

TT30F: Quicken 6 – Printing a One Year Spending Plan

If you have other questions or need additional information, please see me. Thanks.

Before you start

Before you get on to Quicken, it is important that you have your internet account name and internet password to your bank, credit cards, brokerage accounts, and retirement accounts. This information is important as it is required to connect Quicken to your bank and other accounts.

Realize that there are four steps to Quicken. First is to install the program. This takes time but is not hard. Second is to download the data. This is where you connect to your financial institution and download the data into the Quicken software. Third, you accept the data. This is where you categorize each of the entries according to your category list and accept it into your data. Finally, it is the printing of the reports. Here is where Quicken helps you organize the data and print out the reports you need.

Step 1. Install the Program

Put the Quicken 2012 Deluxe CD in your computer. It has an Auto-run program, and should run automatically. If it gives you an option, run the Auto-run program. If the Auto-run does not work, other instructions are on the back of the CD sleeve to install the program manually.

You will be brought to the first Quicken screen. Click on the Install Quicken option. The program will begin installing components on your computer. When you get the next Quicken screen (Welcome to the InstallShield Wizard for Quicken 2012), click on Next. Next you will come to the License agreement. You must agree to the terms and conditions of the software by clicking on the Agree circle, and then click Next.

Next, it will ask you about where you want the files to be placed. The default location is generally fine. Click on Next. You will see a screen that says Install Quicken 2012. Begin installation by selecting Install. It will automatically install Quicken and update Quicken to the most recent update.

Step 2. Download the Data

When Quickenfirst starts, you will be brought to the Overview screen. You will notice that you have a number of Tabs across the top as well as Tabs on the right side.

Click on “Get Started.” You will then be taken to a window to add your Primary Checking Account. Add your Primary Bank Account Bank Name and click on Next. It will ask to connect to the internet.

You may or may not have the option to connect to Quicken using multiple methods. For example, Wells Fargo has CEO Basic Banking, Direct Connect, and Web Connect. Web Connect is the free option. Determine your method to connect to Quicken.

You will be brought to a screen for input of your internet data. Type in your Username and Password and click on Next. Quicken will go out to your bank and get the information. It will bring in all your accounts from the back.

After Quicken has finished bringing in your information, you will be given an option to add other accounts to Quicken. I recommend that with each of your accounts, you put the bank’s initials before each account name. This will make it easier to keep track of multiple accounts from multiple financial institutions. For example, if you are using Utah Community Credit Union, your checking account would be names UCCU Checking, your savings would be UCCU Savings, and your credit card would be UCCU Visa or UCCU Visa Credit Card.

Under Account Name, click on “New in Quicken” and type in the new name, i.e., WF Checking for Checking at Wells Fargo, UCCU Checking for checking at Utah Community Credit Union. Do the same for your other accounts. Once you have set up the names, click on Next. It will go out and get the data for the accounts you set up. Quicken will get the data one bank at a time.

You will be asked if you want to set up a Password Vault. A Password Vault is a place where you put in your individual passwords for each account, and instead of having to memorize 13 different passwords for 13 accounts, you only need to remember one password. I use the Password Vault. If you would like to use it, type in your password for the Vault, and then type it in again. Make sure you remember this password as it cannot be recovered. Click on Next.

If you added a Credit Card, it may ask you for your credit limit. Add it and click Next. It will then show you your accounts you set up. Click Done and you are finished with this step.

After you download the data, if you see a red flag to the left of your accounts, it means you have transactions to accept.

Step 3: Accept Transactions

Once you download your data, Quicken 2012 makes an attempt to categorize your spending for you. It is a first pass attempt, and will need to be checked. It will not be able to categorize your Checks, so these will have to be added manually.

I personally like having each transaction on two lines, instead of one like the Quicken starts with. I like to add a memo for each transaction, which I cannot do in a single line. To get two lines per transaction, click on the account you are interested in, click on Account Actions on the upper right hand corner, and click on Two-line Display. This allows me to comment on every transaction, as well as to add a tag if needed. Tags allow you to further comment on what you are doing. For example, I have a Christmas category. Within that category, I have a tag for each of my seven children.

Generally, when you download data, you will download either 60 or 90 days of data. For the purposes of this class, you will only need to categorize the data for the last month.

Once you click on your account with a red flag, you will see a list of transactions that have been downloaded to your computer, but which you have not yet accepted. You have finished the first step of the process--obtaining your data from your bank. Now comes the second step, downloading the data and categorizing the data.

Categorizing the data is the process of determining which account the transaction should be put in, i.e., Which category should I put in money spent for groceries at Safeway?

Go to your first account. Start at the top line. Look at the Payee or the company the money was paid to. What was the category for this transaction? For example, if your first transaction was a deposit from your company for your monthly salary, you would click on the drop down box below the Payee and find Salary. Salary is a category of Income. You may enter a memo as well if you want to remember more information about the transaction, such as “Salary for ______.” Once you are done editing the transaction, Click on Accept. That transaction will be accepted into your transaction register and will be categorized as you selected. Follow this process for each transaction.

HUGE CAUTION: Transfers Between Accounts

One of the challenges you will find with financial software is the way that your bank handles transfers between accounts. Transfers between accounts is where to take money from your checking account to pay your credit card. It is not just a payment from your checking account—the money is actually transferred from one account, your checking, to another, your credit card account.

If you have downloaded multiple accounts from your financial institution, i.e. Savings, Checking, and Credit cards, the way the bank handles transfers is to put both a deposit and credit in both accounts. So you will have double counted each of these transactions.

However, when Quicken sets up transfers, it is more efficient. It uses single data entry, and puts a “Match” transaction in the other account when it recognizes that there is a transfer between accounts.

For example, if you transferred $100 from your checking to your savings account, you would see a payment of $100 in your Checking and a deposit of $100 in your Savings. When you accept the first transaction into your account, you would set the category as “Transfer to/from [Savings]”. The list of transfers is at the bottom of the category list. Once you did this, Quicken would automatically input another transaction (so you only needed to do it once) in your Savings account.

However, now that you fixed the transfer in your Checking, you will need to go and fix it in your Savings account. Since Quicken will automatically generate the deposit in your Savings account, you will need to go and find the $100 transaction (that is not matched) and delete it from your Savings transactions. Once you make these corrections, your balances in your Savings and Checking accounts should match your available balances from your financial institution statements.

If they still do not match, generally I will go and adjust my beginning balance to make my final balances match my banks final balances.

Step 4. Run the Reports

Quicken has a number of pre-set reports that can be easily run. Once you have downloaded the transactions into Quicken and have set up your categories, you can print a number of reports, such as a Cash Flow Report or a Net Worth Report. To print reports, click on the “Reports” menu. It will bring up a list of different reports, including Spending, Comparison, Investing, Tax, Net Worth & Balances, and Easy Answer Reports. Click on the reports and they should print out. Note that until you have set up your budget amounts, you will not have data in your budget reports.

Quicken is a great tool to help you organize your finances. But you need to spend the time to get to know the program and to set it up. Best of luck.

Disclaimer

The purpose of this material and this class is to help you get your financial house in

order and to help you on your road to financial self-reliance. If there are mistakes in this

material, please bring them to our attention, and we will correct them in upcoming

versions. The teacher, and BYU, specifically disclaim any liability or responsibility for claims, loss, or risk incurred, directly or indirectly, by using this material.

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