Need advice re debit card use from someone using Quicken

joyfulguyJuly 13, 2007

Greetings everyone.

Someone has asked me about how to use a debit card while using Quicken and I lack experience using it.

I need some advice from some of you who have had experience with using debit cards and doing the accounting using Quicken.

Thanks in advance for your guidance, whether offered here or by email to me.

ole joyful

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Hi Joyfulguy,
I use both Quicken and my debit card. I'm not sure exactly what your question is, so will describe how I use it.

Yesterday I went to the grocery store, gas station and post office. I used the debit card for all three transactions.
When I got home, I had the option of sitting down and manually entering each transaction into Quicken, or waiting a few hours for the transactions to show up on my bank account. (I also use online banking, so can check my account activity).
I waited until this morning, and using Quicken, downloaded the transactions directly from the bank's website into my Quicken files.

Works the same way with credit charges.

Note - Quicken may not name the Payee the same as I do. It may use the address instead of the business names, but you can "train" quicken to rename the Payee. Also, it will remember the category I used the last time I downloaded a transaction with this business. For example, it entered "Chevron" for the payee, and "auto:fuel" for the category, then the amount I put on the debit card.

Since I've been doing this, it takes less than 5 minutes for me to balance the checkbook. I no longer have those little errors from entering amounts incorrectly.

I should point out that for this to work, the bank has to have the ability to download transactions in the correct format (most do, I think). My bank, for example, can export transactions in these formats:
OFX (for MS Money), QIF (Quicken 99 thru 2004), QFX (Quicken 2005 and later), QBO (Quickbooks), and CSV (Comma Separated Variables).

I should also point out that there IS a learning curve. DH got so frustrated with it that he manages his own checking account manually (but I also track it in Quicken in case he changes his mind later). I'm still learning new things about the program.
Does this address your question? If not feel free to ask more or email me.

    Bookmark   July 13, 2007 at 11:25AM
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I use MS Money. I handle my debit card exactly the same as if I wrote a check, and enter the transaction manually immediately upon arriving home, splitting it among expense categories accordingly. I enter "DebitCard" for the check number.

    Bookmark   July 14, 2007 at 3:16PM
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I use Quicken, a very old version, but it still works.

I'm assuming you're asking how to "post" a debit transaction. I use the code "EFT" under the "Number" column. Everything else is the same as if you were posting a check.

I also hang on to my debit slips until I reconcile my monthly statement.


    Bookmark   July 14, 2007 at 9:29PM
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I meant to add that "EFT" means "electronic funds transfer.


    Bookmark   July 15, 2007 at 9:53AM
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In talking to a young couple regarding how to develop a good money management system, I suggested that a good way to start is to keep track of every expenditure, to assist in evaluation.

I suggested that they set up a page, probably in a loose-leaf binder, to deal with their cash operation, with date, description, and three (possibly 4) columns, with one for individual expenses, (possibly a second to add several expenditures). One column for cash income as withdrawn from bank account, or other source, etc., and a column at the right for keeping track of balance.

It's important to check amount in wallet against recorded balance on hand frequently at the start, as often there appears to be more cash reported in record book than wallet ... as one (or more) expenditures had not been entered.

I was informed that they didn't do much cash business, but dealt extensively with debit card.

I was going to suggest later that they set up several columns to the right, to break out the expenditures into the various types, with a column for each.

How to deal with the debit card transactions?

I thought that it might be wise to enter each transaction, either as it happens (which I thought preferable), or as they get their monthly report from the bank relating to date and description, but not into the cash columns, as it was directly paid from the bank. To record each transaction only in the columns related to category.
But - many pay bills also by cheque and by credit card.

The reason for the cash columns is to ensure that every transaction is accounted for, but this is not an issue with the debit card transactions, for they show up totally in the bank report.

Then when the bank report comes in, ensure that each transaction that you made is entered, and checked with the bank report, entering any that hadn't been earlier.

That way, each of those two types of expenditure shows on the detailed page.

I suggested that they keep a report of their bank account transactions on the back of last month's record, on the page to the left. The cheque register would show the various expenditures during the month on the full financial report of expenditures and would be entered either as they were written, or, I thought preferably, after the cash transactions for the month (possibly including the debit card activities, as well), had been finished.

Then, one gets a report from one's credit card transactions and each transaction would be entered in the various relevant categories.

As many report that Quicken is easy to use, and quite comprehensive, I'm quite sure that it'll have an easy way to deal with the debit card transactions.

ole joyful

    Bookmark   July 16, 2007 at 3:21AM
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ole joyful,

Although I don't use it, Quicken allows you to set up a cash account specifically to record cash transactions. (I carry so little cash since I use my debit card nearly exclusively).

    Bookmark   July 16, 2007 at 8:30AM
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Instead of a number of the check, I put in POS, meaning point of sale. Since I do banking by mail, that get banking by mail, I will have to check what I put. The column where the numbers go you can put anything you want in it. Sometimes when I use my debit card, it will show up as POS or like a credit card. That way, you can put in the stores name or gasoline etc.
If you want more help, just email and I will clarify that column.

    Bookmark   July 16, 2007 at 4:51PM
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Thank you for your generous responses, folks.

ole joyful

    Bookmark   July 16, 2007 at 6:04PM
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I set up a Cash bank account as if it is a checking account, and enter transactions to it the same way. If I deposit cash to my checking acct, I enter it first as a deposit to the Cash account, then do a Transfer from Cash to Checking. Cash account is reconciled like a checking account by counting the cash in my wallet/pocket to confirm it balances, making an adjustment if it doesn't, then marking the transactions to date as cleared. Very simple.

    Bookmark   July 16, 2007 at 8:52PM
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Quicken has a line for you to put who the check (or other transaction) is written to and a sub-category, where you can specify that this transaction is for say the Utilities, and you can further break that category into Utilities: Water.

Before each specific transaction you have a place for a check number. As several folks have mentioned you can put a code (whatever makes sense to you, be it EFT, POS, or ATM), or even use the codes to further specify which way you used the debit card. To withdraw money from the bank (ATM) or as a debit card/credit card (POS).

I think UNLESS the card is used for specific bill paying (Utilities, etc...), then that portion of the finances would have to be filed under some type of "cash" heading, it's just not real cash (it's plastic cash).

I would also suggest, just as they run the amount in their wallets, they enter the amounts of the debit card transactions immediately. To wait until the end of the month and then go off their bank statements could be a very costly mistake. If for example a particular store does not immediately turn in that (whatever they have to give the bank), it may not show up on this month's statement, it may hit the account first thing next month. If they do not account for it as they would a check, then they may be paying bounced check fees next month. The plastic cash still comes out of the account, just as if you had gone to the bank and withdrew it, and I'm one of those that feels that you need to be aware of how much cash you have available including the amount in the checking account. If you have more than one person on that account, unless you are both recording those amounts daily, then no one knows how much cash is available at any point in time, and that is just a disaster waiting to happen.


    Bookmark   July 17, 2007 at 8:59AM
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I'm using the 2007 version of Quicken. The column where you might put the check number has other options: "next check number", "ATM", "Deposit". "Print check", "Transfer", "EFT", and "Debit".

When I'm transferring money from one account to the other, I use "transfer" - Quicken enters the transaction in both accounts. For example, if I'm paying a credit card bill, Quicken allows me to transfer the funds from the checking acct to the CC account. Of course, when I use the Debit card, I just select "Debit".

I can't imagine waiting until the end of the month to enter the spending. By using online banking, I simply download the transactions the next day (unless I've entered them manually). At any time, I know what my balance is, what checks have or have not cleared.

I use the category/subcategory very much like mom showed. "Utilities/electricty, Utilities/garbage", etc.

One huge benefit is that I can pull up a spending report and see exactly what I've been spending in a certain category. It can be a real eye opener (as long as I've entered the transactions correctly)

Another handy tool is the calendar. I enter on the calendar the dates/amounts that are due. I also enter the dates/amounts of income (my pension comes on the 1st, DH is paid bi-weekly). And it's especially helpful for those once or twice a year bills (prop taxes, insurance). I can plan ahead for them. For the bills that are set up to be paid automatically, Quicken simply enters them on the due date (or a few days earlier if I've set it up that way).

    Bookmark   July 17, 2007 at 9:56AM
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