By Dinah Sanders
May 18, 2004

Switching to Budget can be a difficult transition from Quicken. It is a completely different mental model and it takes some getting used to. You really have to “unquicken” your mind. For that reason, I actually do not recommend migrating your existing history into it. Start with a clean slate at a logical breakpoint such as your next monthly checking account statement. Here are the steps I would recommend for a new Budget user coming from use of Quicken or a program very like it.

1. Understand that Budget does not work on a ledger model. It is all about keeping track of where you are planning to spend your money, where you really spend it and if that leaves you money left over for anything else.
2. While the start-up wizard is probably quite helpful for the average user, it doesn’t give Quicken users the conceptual framework they need to make the transition. I recommend you skip the set-up wizard and instead read the user manual to begin. Not all of it necessarily, but just the “Getting Started” section and those on working with different kinds of accounts, especially the “Complete Detail” section of “Handling Credit Cards“. I know it’s frustrating not to jump right in, but, trust me; you need to shake loose some assumptions about how things work because they are very different than Quicken. It’s just going to take a couple days to wrap your head around Budget and decide if it will work well for you.
3. Understand these key concepts:
   • Accounts – these are the closest things to the Quicken model.
   • Envelopes – these correspond basically to categories in Quicken.
   • Pay Allocations – this is where we’re in brand new territory. Remember that this is a live view of your budget, so every time money comes into your bank account, you will be allocating it to envelopes from which you’ll take the money as expenses arise.
4. Agree with your bank. Make sure that in Quicken you’re up-to-date with reconciling with bank statements. Ideally do your Budget setup within the first week after getting your checking account statement. I did it the same day as reconciling in Quicken and it meant I didn’t have to keep track of things in two places for a while.
5. Begin in Budget in the most familiar territory: create accounts. Make a new account for each of your active bank accounts and credit card accounts. I also made an account for my student loan debt (checking the “allow account to go negative” box for this kind of debt account) and my security deposit. Do one new transaction in each account and name it “opening balance”. When you have an account selected in the left column, the Available envelope in the upper right corner represents the funds which you can allocate to expenses. I only allocate to expenses from my checking account, so 90% of the time I have the Checking account selected. The Total at the top of the column of accounts tells you your net worth.
6. Next, create your envelopes. To keep the display uncluttered, I found it helpful to move some things into two new envelope groups: Once A Month and Rare. I did not create envelopes for payroll tax expenses. Perhaps I’ve misunderstood something, but Budget seems to deal with net, not gross pay. Since I just watch my paycheck stubs during the year and enter my totals straight into my tax forms from my W-2 at the end of the year, that’s one hassle I no longer have to deal with.
7. Set up your regular pay and pay allocations to the various envelopes. This is really the “make your budget” step. Remember that the pay allocations only help you split money into your envelopes when you use the “Enter Pay” transaction. On their own, the pay allocations do not adjust your bank account or envelope balances. Your balances only change when you record transactions.
8. Now that you’ve got the framework for everything in place, select your checking account and drag allocations from the Available envelope to the various envelopes. This step is catching up with the fact that the balance that is in your checking would have been distributed through past allocations had you been running Budget back then.
9. Now you’re ready to begin using Budget. Enter any transactions since your bank statement and you should see an up-to-the-minute view of what’s happening with your money. When depositing your pay check, remember to use the “Enter Pay” command and not the normal “Deposit” command.
10. I expect it will take a few months of using Budget for me to settle in and perfect using it – it certainly took at least that long with Quicken! – so I may post some additional tips in the future. For now, a couple little notes:
    • I made envelopes for all my regular monthly bill categories including one for my student loan. When I pay that bill, I make a transfer from that envelope to the student loan account.
    • I also made an envelope for the amount I want to move into my savings account every month.
    • I follow the recommendations for dealing with cash on hand in the example from the “Handling Cash” section of the help.
    • Note that Budget, unlike Quicken, doesn’t autosave your work. There’s a handy save button in the top left corner of the display; use it frequently!