Every year, the makers of Quicken and Microsoft Money trot out the upgraded versions of their personal finance software and crow about all the “new and improved” features.
The new 2002 Deluxe versions already available in stores live up to the advance publicity. Whether you’ll want to spend the money to upgrade is debatable, however. After all, the 2001 versions that were so great last year should still satisfy your needs.
Both Quicken 2002 Deluxe ($59.95 before a $20 mail-in rebate for upgrades) and Microsoft Money 2002 Deluxe ($64.95 before a $20 mail-in rebate for everyone) will pay for themselves many times over.
These programs help you manage just about all aspects of your financial life, from budgeting and tracking expenses to handling credit, reducing debt, investing, insurance, tax and retirement planning. They also make planning fun and personal with interactive features and integration with outstanding Web sites (www.quicken.com for Quicken, and money.msn.com, the combined “CNBC on MSN Money” site for Microsoft Money).
Without Internet access, you can’t take full advantage of the programs. But you still get a pretty good deal. I found some of the most significant improvements in the so-called “offline” features, such as budgeting and analyzing cash flow.
Unexciting? Perhaps. But these basic activities remain the foundation of sound money management. Many investors going through their first protracted down market are rediscovering that fact.
“Last year, people may not have worried about how much they were spending on certain items, such as dining out,” said Jeff Zimmerman, Quicken product manager. “This year, they may be.”
Creating and modifying a budget is simpler with Quicken’s new version. And you can have the program automatically alert you if you spend more than the amount you designate in any category. Another new feature automatically assigns categories to many of your transactions — for example, a purchase at Dave’s Video’ would be categorized as an entertainment expense. Assigning categories to transactions is essential to accurately keep tabs on where your money goes.
Microsoft Money also has improved and simplified the budgeting process. You can set monthly “spending thermometers” so the program reminds you when you overspend in any category.
Both programs generate numerous graphics and reports that let you see where your money goes and what changes you may want to consider.
In terms of readability and detail, I give a slight edge to the Microsoft Money reports, including its revealing month-to-month comparisons. Both programs can keep a running tally of your projected income tax liability and help you understand the tax consequences of investment decisions. They both offer ongoing on-screen advice relevant to the information you enter (for example, you may have too many credit cards, or too big a balance in a low-interest checking account).
Both allow you to customize the information you first see after loading the program. You also can customize reports to include the facts and figures most important to you.
With Internet access, you can do much more, including online banking and fairly sophisticated portfolio analysis and investment research. Which program is better? It’s hard to say. Each has its own look and feel, so it often boils down to personal taste.
Based on the lower price and ease of use, I give Microsoft Money a slight edge for new users.
Competition keeps making each program better and consumers accustomed to either one have no compelling reason to switch.
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Humberto Cruz can be reached at AskHumberto@aol.com or c/o Tribune Media Services, 435 N. Michigan Ave., Suite 1500, Chicago, Ill. 60611.
