Checks and balances

Entrepreneur, May, 1998 by Cassandra Cavanah

Financial well-being is important not only to your business but to your personal life as well. Keeping track of what's going on in your personal accounts will give you more security when making daily decisions whether you're buying a new suit, planning for a vacation or saving for your child's education. Staying on top of what goes in and out of your checking account, what's charged to your credit cards, and what's funneled into savings or investments is what personal financial management software is all about.

The most popular personal money management program is Intuit's Quicken. This program has been around for more than 14 years and has served as the benchmark for other financial management programs. Microsoft's Money has long been trying to catch up with Quicken in terms of market share and features. These two programs are the only real players in a market that has become reliant on strong relationships with financial institutions, such as banks and credit card companies, to satisfy users' demand for high-level online banking, investment tracking and trading, and credit card information.

This software category has changed tremendously over the last decade - evolving from a basic checkbook register to a tool that allows you to do everything from planning your taxes and monitoring your investments to tracking a loan and keeping a household inventory. Both products reviewed here are in their latest incarnations and are state-of-the-art. Unlike Microsoft Money 98 Financial Suite, which can only run on a Windows 95 system, Quicken Deluxe 98 is also offered in a Windows 3.1 version.

CHECKING IT OUT

The checkbook register is the core of these programs. From here, you can enter payments and deposits while tracking which categories and subsets the transactions belong to. For example, an expense can be listed as "Healthcare: Dental" or "Business Supplies: Computers." Deposits are set up in a similar way, making it easy to track where your money is coming from and going to. This data feeds into the extensive charting and reporting features for visualizing and reviewing your income and expenses. Predetermined charts and graphs make it easy to track income vs. expenses, monthly cash flow and budget. If you're diligent in giving transactions the appropriate category descriptions, it'll pay off big at tax time - Quicken 98 can interface with all the popular tax software and can directly import the data into the correct fields of your tax schedules and returns if you spend the entire year doing your books appropriately.

An obvious subset of the checkbook register is the registers of all your other accounts (i.e., savings, credit cards, investment accounts, etc.). The beauty of keeping tabs on your finances via computer is that the scheduled transactions that occur every month, such as automatic withdrawals and direct payments, will all be entered without your having to think about it. (This can sometimes be a disadvantage if you tend to forget the withdrawal is going to occur and then come up shortchanged. For this reason, these programs alert you to upcoming scheduled transactions.)

Further automating the management of your finances is online banking. Both programs let you interface electronically with major banks to view your account statements.

But these programs are far more than glorified checkbook registers; they are tools to help you get in charge of your money. Let's take a closer look at each program to see which one best suits your needs.

MONEY TALK

Because I'm a die-hard Quicken user, I thought it appropriate to first embark on the competition's features in order to fairly compare the two. Installing Microsoft Money was painless - there were no glitches, and I was up and running within minutes. Microsoft guides you through the process of finding any files you want to convert to this program (including Quicken files and old Money files). The conversion process took about 10 minutes, and all my account information appeared clean and clear as day. My checkbook register included all the categories and memos as posted in my Quicken account.

The Money 98 interface is very different from the Quicken interface I'm used to. Instead of relying on graphical icons, Money 98 uses a more text-based navigational system that relies on pull-down menus. I found it less intuitive than Quicken's.

Still, Money 98 cannot be considered difficult to use. On the contrary, I was easily able to find my way around all my accounts. One feature I especially liked was the Bill Calendar for tracking bills and deposits. Here, a calendar shows you when your bills are due, and a graph gives you a balance forecast. While handy, this function is only beneficial if you're up-to-date on all your transactions.

To make this product more compelling than its competitor, Microsoft has provided many additional features. First there's Goal Planner for financial planning. Money includes 21 customizable wizards for working on short-term and lifetime plans. Then there's Microsoft Investor, which links into the Microsoft Investor Web site for tracking portfolios and researching investment opportunities. Subscribers to this service have the ability to search through 8,000 stocks and mutual funds to determine whether an investment meets certain criteria. Next there's Money Insider for articles and information from reliable financial experts.