How to not have automatic transfers to savings count as income? (edited)

Kelacom

In my BOA debit card account, there is a feature that is "keep the change". That is every time I use the card the change from the transaction goes into my savings account. I will purposely put in $20.01 in gas into my car because I really think I'm doing something. Anyway, I noticed that Quicken was counting that as income. I created a category called Savings and made a rule…but as I looked around there really is no preset category that has savings deposit as an option. Am I making sense? When I make any deposit to my savings accounts I am always thinking something could be accounted for in a better way than transfers. I am not the brightest bulb on the marquee sign. Am I missing something?

SRC54

I agree with Dryheat. But I will tell you from a bookkeeping point of view that I hate this.

As I surmised, you don't always get the deposit per transaction so it varies. So you have two choices on how to do this.

Choice #1

You can take your transactions and just round them up to the next dollar and charge them to the category you used, e.g., 29.10 gets rounded up to $30 for gasoline. $12.30 gets rounded up to $13 for laundry and $45.23 is $46.00 for groceries. You have, of course, over reported your spending in Checking.

Then as you get deposits into Savings, you can apply the $.90 or the $2.37 (for the 3) as a negative expense, e.g., Refunded Change. You can put this into any main category you like. I have one called Concomitant, which includes Fees, Bank Rewards, etc. In this way, you subtract the change you didn't get from your spending.

Choice #2

This is the one I would do, but it is more complicated unless you are used to doing a lot of splits as I am (sales tax, food, supplies, sundries, etc.). Good news: Simplifi handles transfers in Splits better than it used to!

You would take the $30 for gasoline and split it $29.10 for gasoline and $.90 as transfer. (Note: you cannot use the Savings Account as the transfer to because you don't know how BOA will make the deposit.). Like wise for $13 for laundry, the split would be $12.30 laundry and $.70 for transfer.

Then as you get the deposits in your Savings account, you just categorize them as a simple transfer as well. This cancels out all the transfers. You're Spending Plan will be more accurate.

Frankly, unless BOA is throwing in some money of their own in this scheme, I wouldn't bother with it. I would just transfer from checking to savings whatever I could afford on a weekly or monthly basis.

But do what you prefer.

SRC54

Well, it is a transfer. You could just note the $0.99 goes into your Savings account by using a transfer to BOA Savings as the category. So if you get $20.01 in gas, you get charged $21 and the difference goes into your Savings?

Now using the category you created is fine but then you will still have to use something to categorize the Savings Deposit. You could use the same category, and then it would cancel it out keeping that category at $0.00. Does the bank make a deposit for each transaction or do they just do it daily or weekly. If the latter, then using the category would work better than the transfer, but if they deposit with each transaction, I would stick with the transfer method.

Walmart is always asking me to round up and they will donate the extra. If I did that, I would use the category of charitable contributions.

DryHeat

@Kelacom

From your description, it sounds like what BOA is doing is creating a second transaction every time you use the card. That transaction is actually a transfer from your checking account to your savings.

You can change the Category in the checking transaction to make it a Transfer to savings. That usually creates a new transaction in savings to match the transfer. But you are probably already downloading the matching transactions from your savings account, so you will have to count on Simplifi to match the two transactions — which doesn't always work. If it doesn't, you have to clean it up.

You can also create a Rule that changes the Category for these checking account transactions into a Transfer to the savings account automatically. You will have to monitor that to see if the matching is occurring correctly.

I would give it a try to see how it works for you. If it is inconvenient, you can always delete the Rule.

Flopbot

@Kelacom ,

Do they always show up with the same Payee or the same downloaded as bank name? If so, try creating a rule using that downloaded name and set the Exclude from Spending Plan options.

While I don’t have that kind of account, I do have lots of savings accounts with small, regular deposits. That I know of, I’ve never noticed them being counted as income.

Would that help?

Kelacom

Hello everyone,

The ""Keep the Change" program differs in the deposit into my savings from my debit account. Depends on how many times I use my debit card and when the bank updates transactions. If I buy something for $1.96 it will deposit $.04, or I could make a series of purchases and costs will add up and say $4.56 will be deposited. I already made a rule and said to look for these and call it savings. But it is still in the income main category.

I have been doing this for a few years and according to my debit account I added over $4K into savings since I have been doing this. But is it income? Quicken is accounting it as such. Is transferring some of your income into savings considered income again?

Thanks for the responses! Just wondering if there is something I am missing in accounting for savings. I am discovering new stuff every time I log into Quicken.

DryHeat

@Kelacom

But is it income?

No, it's not income. You are just automatically transferring small amounts from the account your debit card is linked to (probably your main checking account). From an accounting viewpoint, it's no different than if you decided to move money from checking to savings manually. It's money you already had, not income.

You can use any of the methods described above to recategorize it. The most accurate would be to make it a transfer from one account to the other.

DryHeat

@Kelacom

I've been assuming some things about this program. If these aren't true, let me know:

• BofA makes a daily "keep the change" transfer from your checking to your savings
• you see that transfer on the BofA website as one transaction going out of your checking and a second transaction going into your savings
• both those transactions are being downloaded to your Quicken, one in each account.

So, is the problem that Quicken is not recognizing those transactions as two sides of the same transfer?

If that's the case, does manually changing the transaction in checking into a transfer to savings cause Quicken to recognize them as related?

If that's not it, what exactly is the problem?