Recurring items are transactions that repeat regularly. They can be further broken down into recurring income and recurring expenses. Each payment doesn't necessarily need to be the same amount, but it should be generally expected to occur on a regular cadence, as in you should be able to predict when your next payment will be expected.
Examples of recurring expenses include a monthly Netflix subscription, a quarterly insurance payment or a yearly gym membership.
Examples of recurring income include your salary or interest income.
Typically if you want to cut down on spending, recurring expenses will be the first place you look since canceling a monthly subscription can save you a lot of money in the long run!
If the setting for allowing recurring categories is off or there is no category assigned, then a recurring item will be considered a recurring income or recurring expense depending on the notation (+/i) of the transaction.
Why should I track recurring items?
Setting up a recurring item allows you to track all future (and past!) occurrences of this transaction. This could be useful in a number of ways:
track when/if a recurring item has been charged, easily detect discrepancies
figure out your "minimum living cost", i.e. if you didn't spend a single dime on day-to-day expenses, how much would you need to just survive (rent, utilities, subscriptions, etc)
interesting way to separate out your recurring items from your daily expenditures. You might find this useful if you want to look at your stats and trends. For instance, when looking at your most expensive transactions every month, you may want to exclude your rent from that analysis.
How are recurring items handled in Lunch Money?
In Lunch Money, recurring items are tracked separately in its own Recurring Items page. Every month has its own Recurring Items page because you may expect a different set of recurring items every month. For example, if you have a yearly Costco membership to pay for, you will only see that recurring expense on your renewal month.
If you use bank syncing or CSV imports, Lunch Money will automatically detect monthly recurring items. We do this by checking if the same payment was made 2 months in a row. These recurring items are then "suggested" to you from either the Recurring Items page or the Transactions page. You can choose to approve or reject these.
Integration with Rules
When a new recurring item is created, a corresponding rule is automatically created. This rule helps Lunch Money identify future transactions to be recurring expenses.
For example, if you created a new monthly recurring expense for "Pat's Gym" at $30 a month with the expected billing date to be around the 3rd of every month, then a rule will be created to match transactions that are expenses of $30 with the merchant name "Pat's Gym" occurring between the 1st and 5th of the month. The range in days is because sometimes these recurring expenses can be posted to your account with a slight time variance.
Recurring items aren't always the same amount every month. As you create your recurring item, you'll be asked if this is a fluctuating item or fixed. You can always edit any rules later on to change these properties if you wish.
Properties of Recurring Items
There are a few properties you can set for recurring items. Most are self-explanatory such as name and description.
By default, recurring items can be categorized. This is useful if you'd like your budget every month to include your recurring items and you'd like these recurring transactions to be reflected in category totals.
Alternatively, if you'd prefer recurring items to be totally separate, you can adjust this from the Settings page. In this case, all recurring transactions will be treated as if they were in their own category: "Recurring Items" and cannot be budgeted for.
Recurring items for the month can be in one of three statuses, as indicated by the icon on the far right:
In this example, let us say today is June 15. This is important because the statuses are based also on today's relation to the Billing Day column. The Billing Day column represents the date Lunch Money expects your recurring item to be billed & paid this month.
The green checkmark represents that a transaction has been linked to June's payment for Netflix. If this transaction occurred on a date different from the expected billing date, then Billing Day will update to reflect the actual transaction's date.
The yellow warning represents that a recurring item's expected billing date has passed, but no transaction has been linked. This indicates a potential issue that you should look into!
The grey clock represents that a recurring item's expected billing date is in the future, so there's no need to worry about its status at this point.
You can optionally set the active period for any recurring item. This means either setting the start date or end date. Any recurring item without an active period set will show up for all months.
For example, if you started a new Netflix subscription in January 2020, then you can set the start date of that recurring item to be January 2020. This means that the recurring item will not show up in December 2019 or earlier.
On the flip side, if you terminated your Netflix subscription in June 2020, then you can set the end date of that recurring item to be June 2020. This means that the recurring item will not show up in July 2020 or later.
The relationship between Transactions and Recurring Items in Lunch Money is important to understand. In Lunch Money, transactions are represent a singular expense or income to a particular account. A transaction can be linked to a recurring item, which means that transaction represents that month's payment for the recurring item.
Once a transaction is linked to a recurring item, it cannot be further split or grouped. A recurring transaction will be in its final form and will inherit the same merchant name and description as set in the Recurring Items page.
A recurring transaction will show a recurring icon next to the amount
While you can't split or group a recurring expense, you can always link a split or grouped transaction to a recurring expense!
Creating recurring transactions
Once you have created your recurring item from the Recurring Expense page, you may want to manually create transactions linked to these recurring items.
The "Create from Recurring" feature will allow you to quickly create recurring transactions for recurring items that haven't been paid yet for the month.
You can also link an existing transaction to a recurring item. To do this, open the details pane of any transaction and select "Convert to recurring expense". From there, you can convert it to an existing recurring item or create a new one based on the transaction.