Automating Your Budget in Monarch Money

As a financial coach, I'm excited to show you how to make your budget in Monarch money automated. With a little bit of upfront work, you'll be able to save time and reduce the need for manual adjustments.

Adjusting Transaction Rules

To start, you'll need to review and correct your transactions. Open up all of your transactions and review each one. Monarch does a good job of categorizing transactions, but it's not perfect, so spend some time correcting any errors. You can click on the arrow or carrot icon next to each transaction to get more information, such as the account it's going into, the date, and add notes or tags as needed.

If you're unsure what a transaction is for, you can mark it as "needs review" if you and your spouse are on the same account. Look at the transaction and determine which category it belongs in. For example, if you see a transaction from IBM, you can categorize it as "Britney's Paycheck" instead of "James's Money" if that's where the money is actually coming from.

Setting Up Automation

Once you've corrected and categorized your transactions, you can set up automation rules. These rules will help ensure that your budget stays organized and up-to-date with minimal effort.

To automate transactions, click on the "Automate" popup and select the Merchant's name, IBM, to categorize C transactions as "Britney's paycheck". This rule can be applied to all similar transactions. Under the "Cash Flow" tab, scroll through transactions and update any errors or categories that need to be adjusted. Create a rule by clicking on a transaction and selecting a category. Future transactions from the same merchant will be automatically categorized.

Alternatively, you can access the "Customize Rules" option by clicking on the top right corner of the "Transactions" tab or through the "Settings" menu. You can change a single transaction's category without creating a rule by selecting the category and clicking "Dismiss" when prompted to customize the rule.

Customizing Automation Rules

You can create detailed automation rules in QuickBooks Online. Examples of detailed automation rules include:

• Automatic categorization of specific transactions (e.g., Chipotle transactions categorized as "Restaurants")
• Customization of transaction categories for specific merchants or accounts
• Automatic application of transaction tags or notes
• Rules can be created for specific date ranges, amounts, or account types
• Rules can be customized to apply to specific types of transactions (e.g., credit card transactions)

Benefits of Automation

The benefits of automating your budget in Monarch Money include:

• Saving time and reducing manual data entry
• Increasing accuracy and reducing errors
• Simplifying transaction categorization and tracking
• Allowing for more detailed financial reporting and analysis
• Enabling more efficient accounting and bookkeeping processes

Rule Setup and Management in Accounting Software

Deleting Existing Rules

To delete all existing rules, click on "Options" and then "Delete all rules". Note that deleting the rules will not affect transactions that have already been categorized in the past. However, deleted rules will no longer affect future transactions.

Creating a New Rule

To create a new rule, click on "Create rules". The rule setup is similar to an "if-then" statement. The left-hand side allows you to specify the condition (e.g. "Merchant"), and the right-hand side allows you to specify the action (e.g. "Update category").

For example, to categorize Walmart transactions as "groceries", you can:

• Set the condition to "Merchant" and select "contains" for the operator
• Enter "Walmart" in the value field
• Set the action to "Update category" and select "groceries"
• Check the box to update existing transactions if desired

You can add additional merchants to the rule by clicking on the rule and adding more Merchant names. This will ensure that all transactions from these merchants are categorized as "groceries".

Rule Application

Once a rule is created, it will be applied to future transactions. Existing transactions will not be affected by the rule, unless the "update existing transactions" option is checked. Rules can be modified or deleted as needed, and multiple rules can be created to handle different scenarios.

Customizing Rules in Monarch Money

Creating Rules

Create a new rule for each specific transaction or category, or combine similar ones into one rule. You can categorize transactions by amounts, for example:

• A set amount for a specific category (e.g., $1.25 for "Child Activities")

Use conditional statements to create rules based on:

• Amount (greater than, less than, or between)
• Category
• Account

Examples of Rule-Creating Scenarios

• Paying for piano lessons via Venmo: create a rule for Venmo transactions with a specific amount for "Piano"
• Shopping on Amazon: create a rule for the "Shopping" category with "Needs Review" and assign your spouse to review transactions
• Hiding transactions from a kid's account: create a rule for the kid's account to hide transactions

Tips for Customizing Rules

• Start with specific rules for regular or monthly transactions
• Create rules as they pop up, rather than trying to set up all rules at once
• Be mindful of overwhelming yourself with too many rules

Additional Resources

Watch the video on setting up a budget with Monarch Money, and subscribe to the channel to be notified of upcoming videos on syncing funds and dealing with credit cards in Monarch Money.