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AnchorDesk

David Coursey
The new MS Money: Why it's worth a try

David Coursey
Executive Editor, AnchorDesk
Friday, August 8, 2003
TalkBack!Add your opinion
Microsoft recently released Money 2004, the latest version of the financial software I've been using for a couple of years, mostly because of its easy link to my Pocket PC device. The fact that I rarely use the PDA version of Money is beside the point. It's the concept of mobile financial management that counts, don't you know?

Money managers
ZDNet reviewers haven't tried out Money 2004 yet, but they have given good scores to its predecessor, Money 2003, as well as its main competitor, Intuit Quicken 2003.
Though I don't get as much out of Money as I could, it has helped me organize my finances better than before I started using it. If you're not managing your finances electronically or paying bills online, MS Money 2004 would be a great app to start with. For those who already use personal finance software, the new Money could be worth it just for all the free services that come with it (more on that later).

MONEY IS A program that provides the tools you need to completely organize your financial life, provided you're able to feed Money the data it needs. Sometimes this is easy--I can download statements from my bank and Charles Schwab for my checking and 401k accounts, for instance.

Nevertheless, the holy grail of having a real monthly budget remains elusive, mostly because I am not willing to invest time in manual data entry. Also vexing is keeping track of my cash expenditures--if I wanted to budget them, I'd need to split them up into several different categories.

My debit card transactions are similarly hard to manage: Yes, I can download records of my transactions from the bank just fine, but unless the transaction is for a single item (say a vet visit) or a single class of items (like groceries), I have to manually split the transaction among multiple categories. I suppose it would be possible to group items into categories while I'm waiting in line at the store, and pay for them as separate transactions, but that would doubtless upset the people standing in lie behind me.

As a result, Money only gives me an approximate idea of where my money goes. But it keeps be from overdrawing on my bank accounts and I am never late paying my bills, thanks to its helpful reminders. It also helps me forecast my spending and savings. All of these benefits make the money I spent on Money well worth it.

MONEY 2004 is a good example of what Microsoft means when it talks about "software as a service," in which an application's functions are coupled with external services and subscription content.

For example, the new Money comes with two free years of online bill pay from MSN. If you aren't paying your bills online, you should be. I've been doing this for a couple of years now and have never had a problem. I am also now getting my monthly telephone bill, from SBC, online. While I don't let SBC automatically debit my checking account--a privilege reserved for the mortgage company--it's easy to read the total due in the e-mail, open my bank's Web site, and pay it electronically.

With online bill payment, I never forget a payment and never have to write a check, address an envelope, lick a stamp, etc. All I do is select the payee and fill in the amount. For a couple of monthly bills that are always the same amount I have the bank automatically make the payment for me.

I don't use MSN to pay bills online, although if my bank didn't make it so easy, I probably would. If I wanted, I could also pay bills directly from Microsoft Money, using either my bank or MSN's bill payment system.

Besides two years of free online bill payment, the 2004 version includes a capital gains tax optimizer provided by GainsKeeper, online tax prep and filing from H&R Block, and credit monitoring and a credit report from Experion. Microsoft says these free services are worth several hundred dollars.

Customers also get access to MSN Money Plus online, a subscription-based service where you can access your financial records from any Web browser, and CNBC-branded financial information and news content, which appears within the Money desktop application.

THE SERVICES freebies aren't new--Microsoft has offered free bill paying and free tax returns before--but they do provide an incentive for customers to upgrade on a yearly basis, something a mature application like Money wouldn't otherwise require. If you don't buy the newest version of the software, you won't lose access to your checkbook register or stock portfolio, but the online services will expire in a year, or two, or three, depending on the service and which version of Money you purchased.

Speaking of versions, there are four, ranging from a $29.95 bare-bones standard edition to an $89.95 small-business edition.

If all you want is a check register, budgeting, and debt planning, the standard edition is for you. If you need tax help, free bill paying (for one year), and investment tracking, consider the $59.99 deluxe edition. Spring for the $79.95 premium edition, and you get another free year of MSN bill paying services, the capital gains optimizer, a credit report, and credit monitoring. The $89.95 small-business version adds invoicing, inventory, cash flow, and payroll features. (The standard version comes with a $10 rebate; the deluxe, premium, and small-biz ones come with a $20 rebate.)

There are a number of noticeable feature changes and enhancements to Money 2004. The most important among these are tools for personal credit management and understanding and improving credit scores; a cost of purchase calculator that shows the role interest plays in an item's total purchase price over time; and better access to financial news and alerts.

To take a closer look, you can download a 60-day, free trial version of Money 2004 from Microsoft's Web site.

IF YOU USE Money 2003, you can probably get away with waiting until the 2005 version to upgrade. There's no must-have feature in 2004 that 2003 lacks, although free bill payment and tax preparation/filing services could save enough money to make the upgrade essentially free.

For people who aren't managing their money using their PC, Money 2004 is the best reason to start that I've seen. My advice is to start small, perhaps by downloading bank statements and paying bills online, and then try budgeting, portfolio management, and other features as you go along.

And don't do what I sometimes catch myself doing: feeling guilty about all the features I don't use. Sure, I'd like to have a really organized budget and be able to document where all my money goes, but I'm not willing to do the work. Instead, concentrate on how much better off you are for the effort you do expend. For me, the fact that I no longer have late bill payments is a major improvement, and it's all thanks to Money's electronic reminders. And that alone is worth the price of the software.

Do you manage your finances electronically? Why or why not? If so, which software app is your favorite? TalkBack to me!

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