Thoughts On Personal Finance Software Packages – And Why I Don’t Use Them

I recently had a lengthy IM conversation with a reader who asked me what financial software I use to keep my finances in order. I responded with the truth: I use Microsoft Excel (I received Office as a gift – otherwise, I would use OpenOffice Calc). This launched a lengthy discussion about various software packages and why I don’t use them.

The two “big” commercial personal finance packages (Microsoft Money and Quicken) are pretty similar – don’t let anyone tell you otherwise. Their interfaces are a bit different, but most of the primary functionality can easily be found in both packages: tracking expenditures, keeping track of your investments, and so forth.

However, there’s one big problem I have with both of them: they’re both the equivalent of attacking a peanut with a jackhammer. Both packages have reached a point where they’re so laden with features that they’re not intuitive to use or figure out, and the time investment required to learn the package and figure out the flow of work that works best for you is rather large.

I know very well that if I were to sit down and really invest the time to get one of these packages customized to how I want to do things that it could be very useful, but the truth is that I mostly am seeking a small number of data views to understand where I’m at: the balances of all of my debts and their interest rates, my monthly net worth calculation over time, and my active account balances. Guess what? With the exception of the account balances, these were all easy to set up in just a few minutes in Excel and I have them exactly like I want them.

I’m sure that Quicken and Money fans will respond to this post by listing a ton of features of their favorite software package that I’m missing out on, but that in itself is another problem: it takes significant time to really take advantage of those features. I’m not really interested in downloading and labeling transactions every single day (or facing a huge backlog of them after a week or so) just so I can see my current account balances – I can already see these things through online banking. I also don’t want to spend time correcting debits and credits between various accounts so that the reports on each account aren’t completely nonsensical – sure, I could “learn” the ins and outs of each system, but why not just do them in Excel?

Even worse, both mainstream packages force you to upgrade to a newer version within three years because they shut off many of the online features.

In the last month, I thought that it might be interesting to write detailed reviews of both packages and perhaps a “getting started” guide for each, so I downloaded them both and gave them a long time to prove themselves to me. I spent hours trying to use each program and figure out what’s good and bad about each of them, and all I kept facing was interfaces that took a lot of work to figure out and maintain and regular program crashes. For me, this is just not something I’m interested in dealing with just to track expenses, and I can’t honestly recommend either to my readers.

I’ve given both packages an extensive chance to prove themselves to me, and all I’ve faced are unintuitive interfaces, time investment without fruition, program crashes, and confusion. The time would have been better spent for me just to set things up how I like in Excel and move on with life – so that’s what I’ve done. I’d love to hear a truly compelling reason why I should abandon my Excel spreadsheets and move to one of these software packages – after trying each for several weeks, I certainly don’t see it.

You can try a sixty day trial of Quicken Deluxe for free if you want to give it a whirl. Similarly, Microsoft Money Deluxe has a ninety day free trial.

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  1. Sean says:

    I’m slowly coming to this realization myself…

    One of the goals I set was for myself this year was to start tracking my finances through a personal finance software package, but I’m finding quicken might be more hassel then it’s worth.

    I’ve had to re-setup my finances three times since I’ve messed it up trying to reconcile my available balance at my bank with quicken’s balance. Pending transactions don’t download, as well as moving my money between 3 accounts is less then intuitive.

    I’m going to stick with it for a little while longer and hopefully it will all click, but if not soon, then I am going back to Excel spreadsheets as well.

    -Sean

  2. Martijn says:

    how did you organise your xls? did you use any funky calculations? I also use excel for my financing, but I really am not into it. Maybe you can show us some templates you find easy to use?

  3. Nathaniel says:

    Instead of getting Quicken or MS Money, I would recommend Budget by Snowmint Creative Solutions(http://www.snowmintcs.com/). It’s relatively simple program compared to Quicken or MS Money, but still has the features you need, costs less, and fits my financial philosophy better.

    What’s different about Budget is that, unlike other financial software that focus on tracking your transactions, Budget focuses on planing for them. It’s based around the idea of creating and sticking to a budget based on the “Envelope System”. It took me a little while to get comfortable with it, but now I can’t imagine doing anything else. It’s really great to know, to-the-penny, how much money I have to spend, after I have set aside money for my monthly obligations (rent, monthly services and savings goals) as well as setting aside money to save for irregular variable expenses (e.g. Car Repairs, Travel). It’s really empowering.

    The only negative thing I would say is that its UI is a little clunky. But I can look past that because using this software has truly been one of my keys to getting out of debt and achieving financial stability over the past few years–I highly recommend it!

  4. Don says:

    Anyone here use wesabe.com? Thoughts?

  5. amy says:

    I’ve just started using the software program at
    http://www.youneedabudget.com and I love it. It’s a simple program to use, buy it once and it’s yours forever (19.95 and 39.95 versions)Great for tracking cash flow and managing your budget. Works well also for people on the envelope system.
    Can’t say enough good things about it. I too tried Microsoft Money in the past and hated it.
    Just didn’t work for me for what I wanted and it
    was a pain in the neck to figure it out.

  6. Refilwe says:

    I haven’t played around too much with either MS Money or Quicken. But I do use a program called KMyMoney written for linux.

    I find it simple enough (but deep enough) for all my needs, but I understand that the typical reader of your site likely runs Windows exclusively.

    I suppose many people use Financial software instead of a spreadsheet because it motivates them. Personally, having that software there is more compelling than a spreadsheet, and if that’s what it takes for me to manage my finances in detail…it’s all worth it. If some readers use a wall with different coloured post-its for debits, credits, debts, assets etc. then it’s worthwhile just to have an accurate financial self-portrait.

    I don’t think there’s a need for anyone to “convert” you from a spreadsheet-based system to a financial software-based system.

  7. kellie says:

    I’ve used Microsoft Money for several years and I think it’s pretty easy. I’ve never had a problem with the system crashing and I’ve never had to re-enter my data because something got screwed up. I thought it was pretty easy to learn in the beginning as well. I download all my stuff from my bank and credit cards on an almost daily basis – I think this is simpler than retaining receipts and entering them later or even entering things into your check register. Money will remember what you categorized the payee as last time and automatically fill it in.

    I would suggest if you were wanting to start using one of these programs to start at the beginning of the year – to me it sounds simpler than starting in the middle of the year. Also, I don’t use any of the online features so I can’t remark on those and therefore I don’t run into an issue when the company decides to not offer support after 3 years.

    I could use Excel and wouldn’t mind setting up an elaborate spreadsheet (I did it in college to track my GPA and for work to track my time card -taxes, overtime, shift differential, etc) so I’m no stranger. However, for me, there would be something I couldn’t get the spreadsheet to do and eventually abandon it and all that time would be wasted.

    Just my 2 cents.

  8. Chris K says:

    Don

    I use wesabe a lot. It is a great “aggregation” tool for all your accounts, investments, etc.

    Gives you what you need to know, with minimum fuss.

  9. Trent says:

    Martijn, there are several Excel worksheets I set up throughout the archives – search for spreadsheets.

    Don, I like Wesabe as software, but I have some discomfort about sharing my data on a site without a strongly-worded and backed data security policy.

  10. Anthony says:

    I have recently realized that I don’t need to use one of the fancy software packages to track my money. I thought I was somehow better off because I was keeping track of my accounts in a software package instead of just online. My moment of zen came when I realized that all I was doing was using the information from online anyway. I wasn’t any better off because I was just duplicating the same information in two different places.

    I have been slowly building up a repository of spreadsheets to help me analyze my financial outlook. Just this weekend I put together a system for my retirement account because that one doesn’t track well online. Once a quarter all I have to do is drop the amounts from my statement into the spreadsheet and off it goes.

    I wouldn’t use a website to keep my financial information; even with a strong security policy. Working in the computer security field just makes me trust online databases even less. It’s the same reason why I will not do my taxes with any of the online services. I don’t want my financial information sitting on their servers.

  11. Erika says:

    If you are willing to do some learning, don’t forget that GnuCash is a reasonable open source alternative. I have never used Quicken or MS Money myself, but I find that GnuCash does everything I need.

  12. Austin says:

    I found that Money and Quicken only showed you what you had already spent. I started using Mvelopes about 4 months ago hoping that it would help my wife understand money. I was laid-off shortly and Mvelopes helped me budget my emergency savings out to last several months. Unlike the other financial management programs it shows you how much you have left for each category. It also lets you pay bills online for no extra charge and does all the regualar things. I know I sound like an ad, but I’m really just happy with the service. I was hooked after the 30 day trial.

  13. Shawn says:

    IIRC Quicken only locks you out of using Quicken to download the statements after 3 years. You can still download the statements through your browser and have Quicken import them. I use Quicken to track my finances. I did stop doing the detailed accounting of my 401k (I only update the holdings quarterly now). That was way too much of a hassle, but for tracking account balances, net worth, and simple forecasting it’s a great tool. For instance I setup recurring transactions that Quicken enters in to my register 14 days in advance so I have a rough idea of what my balances will be in 2 weeks. I don’t know of a way to do that in Excel that wouldn’t require a significant commitment, not to mention one out of the grasp of most users. OTOH, this is one area where if it works for you go for it.

  14. kate says:

    another plug for wesabe here–I trust them over Microsoft! Also, it’s very intuitive which seems to be your biggest complaint with Money/Quicken

  15. Amy says:

    I dislike Money and Quicken for the same reasons Trent mentioned — what a headache! I used Excel for a while too, but I ended up using a simple little program called MoneyDance because it was easier to download transactions to categorize my expenses than using Excel. MoneyDance is independent software, and it works on any platform (Windows, Mac, Linux). (It’s not a web-app; it’s java-based software). If I hadn’t found that, I’d still be using Excel, and I think there are still some things that are just as easy to do in Excel. Downloading transactions is really the only thing you can’t do in a spreadsheet.

  16. Doug says:

    I have used Quickbooks for years, since version 3.0 probably 12 years or so. It is slightly more complex than quicken but not by much with the way quicken has changed over the years. I know my way around the software pretty well since I use it to manage the accounts for 2 separate companies. However, I still feel that it is just not worth the time to use this to manage my personal finances. It’s just too much trouble for the limited amount of reporting that you need for personal financial tracking.

    Quicken promotes itself as a complete financial planning service. However, I wouldn’t trust any recomendations from a company that promotes zero down,interest only, adjustable rate home mortgages as a “Smart Choice”.

  17. akl168 says:

    iBank on the mac works really well for us. Very easy to use, and you don’t have to upgrade all the time. I do like having everything consolidated in one place, and without having to go online.

    http://www.iggsoftware.com/ibank/

  18. Karl says:

    I am new to the whole budgeting thing, but I think that PearBudget (www.pearbudget.com) is a great, easy tool. It is just a template for Excel, but so much more. And it is Free!

  19. Tyler says:

    I use MS Money since I got it for free. Trent, the good thing about any software package is that once you have it properly configured and set up the way you like it(just like the spreadsheets you have set up), all you have to worry about it entering the numbers correctly. For this, it’s very simple – make sure the #’s from your online account statements and your register in Money jive up. Once this is all entered, you get a chance to use the power of these softwares. You get great cash flow analysis, monthly income/expense statements, net worth, etc. all laid out in a very nice format – much more so than Excel IMHO. You can also import all your Excel information if necessary – and vice versa (export to Excel) Isn’t this the same thing you are doing with Excel (just plugging in #’s)? I find Money to be VERY helpful and it does what I need it to do and that is all that matters.

  20. adam says:

    I’m a big fan of Clear Checkbook ( https://www.clearcheckbook.com ) It’s totally free, not directly linked to any of your bank accounts and is a good way to keep track of what you’re spending. I’m not sure you could call it a ‘complete’ finance solution, however the reports and account tracking features are very handy in analyzing how much you spend each month.

  21. Ralthor says:

    I’ve used Quicken for a long time on and off. I must agree the UI is complex. If I hadn’t used it for a while and then get a new version it takes me quite a while to figure it out. That said downloading/categorizing/accepting all my transactions creates a strong picture of exactly where my money is going and it has helped me catch several charges I didn’t want that I wouldn’t have noticed just looking at the current balance and glancing at my transactions.

    I like the Quickbook idea. I have never used it, but I know a lot of companies use it or packages based off of it. If you are in accounting or thinking about going into accounting using and really learning quickbooks would be a nice skill to put on a resume.

  22. rhbee says:

    I use Quickbooks for our Corp and investment record keeping. It’s loaded with features and report making capabilities, etc., that I never use. Essentially, it, like other finance programs I’ve encountered, assumes that I know accounting, and if I don’t that’s okay because it’ll do it for me anyway. Ha Ha.

    So I developed a response to this which works for me. I make it work as my electronic file cabinet. I store my records there and when I need info I access it using my own plan of operation.

    And finally, I rarely upgrade. Every four or five years, sometimes six, I buy one, but for the most part I ignore the constant sales pitches and upgrades because I am using the program rather than letting it use me.

  23. Lifeguard says:

    Personally I use M$ Excel 97. Yep, the program is 10 years old and it still going strong. I love what rhbee said, and I agree with it totally:

    “I am using the program rather than letting it use me.”

    QFT.

  24. paula says:

    Thank you for this post!

    I’m old fashioned: I don’t do banking online, so I just need a system for keeping the books. I’ve always had a second-hand Mac with whatever version of Quicken came with it. I started with Quicken in 1995. The next computer, 1998, had a version that wasn’t Y2K-friendly, so in 2000 we added the newest version. We got a PC in 2004 with a version of Quicken that was, as Trent so aptly put it, a sledgehammer for my peanut-sized financial system. I was disgusted, so we kept the Mac going. Unfortunately it died a few months later. In 2005 my daughter gave me her old Apple, which dated to 2001, and I’ve been using Quicken on that machine ever since.

    Now that I’ve read “Getting Things Done” and “Your Money or Your Life,” I’ve totally revamped my Quicken categories. I have wondered if there’s a different program that would suit me better in my new state of enlightenment. :D I look forward to checking out all the great suggestions posted above.

  25. HappyRock says:

    I love my Microsoft money system. I do download the transactions every day or two, and it doesn’t take more than a minute to reconcile them.

  26. Debbie says:

    I also use spreadsheets (a version of Open Office for Macs). I’ve never seen financial software, so I can’t compare, but I suspect I can’t personalize it as much as I would like. Over the years, I’ve made quite a few modifications to my system. It’s not the best-organized thing in the word, but it suits me. Someone asked for templates, which I don’t have, but I’ll tell you a little about the worksheets I have (all tabs in my finance document:

    1) Stock values – At the top of one worksheet, I list all the stocks and mutual funds I have and how many shares I have. Any time I feel like it, I can input the prices for that day and see my new total.

    At the bottom of the worksheet, I keep a history of all the stock prices for the days I’ve checked. I set up the bottom row to do the math from the figures at the top of the page, and I can insert a row above it and just type in the date and all the numbers I see.

    Then I have a chart showing this history.

    2. Stock trading – I keep track of when I buy and sell stock, how much I traded, and what the prices were. This comes in handy when I’m ready to sell some but not all of a stock–I can try to sell in the same quantities I bought, which makes taxes much easier.

    3. Savings – I have a thing sort of like a cash flow page that shows, on the top, where my money is and, at the bottom, what it’s for. I have one column for the current day, and at the beginning of each month, I insert another column and record the numbers for that month. I add notes on where the money went like if I paid my six-month car insurance bill that month. This sheet helps me simulate the envelope savings system–each line in the what-it’s-for section (saving for next car, current car expenses, etc.) is like an envelope showing me what’s left. The difference is that sometimes some of the numbers go negative for a little while if things don’t go according to plan.

    This way I don’t have to have a separate savings account or whatever for each line item in the budget. I keep track of it here instead of by account.

    4. Net worth – This page has all my assets on it. I don’t have any debts except for my mortgage, so I just subtract that amount from the value of my house and enter the difference as the value of my asset. Again, I add a new column each month so I can track change, and I have a chart.

    5. Future net worth – I have a page where I record my net worth each year and calculate long-term estimates, because I’m a geek like that.

    6. Early retirement progress – I have a whole page just for retirement savings because that is my next big goal. And I have a chart that compares my spending to a percentage of my investments so I can watch the two lines approach each other (very slowly), in Your Money or Your Life style. In addition to actual spending, I plot a running average of my spending, for a smoother, easier to compare line.

    7. Retirement – I have separate sheets for social security, my pension plan, and my IRA to keep track of things.

    8. Diversification – I separate my assets into various sectors and keep track of my goals for each sector and my current standing. I also have a pie chart here.

    9. Borrowing – I keep track of things I have lent to people. I tend to forget that otherwise, whereas I don’t forget about things I am borrowing from people, so I don’t write that down.

    10. Flexible spending – I keep track of my flexible spending plan at work so I know how much I’ve spent compared to what is available.

    11. Bonds – I keep track of savings bond values each month.

    **

    I have it so that whenever I look up or calculate the current value of something, I only enter it in one place and all the other places update automatically.

    Each year, I copy the document to a new one and delete all but six months of the history (except on pages where I’m keeping annual histories) and re-organize it so it doesn’t get unwieldy (spring cleaning, if you will). I keep the old ones in case I want to refer back to them.

  27. jake says:

    Well I ave used spreadsheets throughout college for financial tracking, but I was give Quicken Premiere by a friend and tried it out. I thought it was very helpful and convenient. I just bought a new copy of the Quicken Premiere 2007.

    Just depends on how you see things, for me a software like Quicken is so much better then spreadsheets and such.

  28. woody says:

    I used to use Excel to track my finances, and changed to Quicken back around 1998. I’d purchased a house that year and could no longer use the 1040EZ, and decided to try a rebated “free ” version of TurboTax that came with a “free” trial of Quicken. I found it very easy to navigate, and it tracked all the stuff I cared about quickly and easily.
    I have to say I was kind of lured in too by the fact that many things offered free downloads of your transactions. Life is SO easy to deal with when one button click does 80% of the work for you. That alone got me to update (in 2004?) when they changed systems, which I wasn’t too pleased about.
    I do understand that there are some parts that are way too complicated, like the stock tracking bits. But you don’t have to use all that if you just want to track your current balances and minor basic performance stuff. You can call everything a checking or savings account and just have a normal ledger for everything, quite simple.

  29. Gal Josefsberg says:

    I tried using Quicken. It was awful! The UI was incredibly bad and it took me hours to figure out how to do anything (I design financial software by the way, just to give you some context).

    Also, their customer service was miserable. Their software had an error in it that could have caused me to bounce a check but it took them weeks to admit that and fit it plus they insisted on charging me $2 a minute every time I called for support. No thanks!

    I’d much rather rely on a spreadsheet that contains what I need and nothing more. At least I know that one works.

  30. Sunil says:

    I use Yodlee.com. It has most of the basic features or Quicken or MS Money but it’s online so you can access it from anywhere. Also they have built in billpayment and bill reminders. Most people are scared of putting heir info online but don’t realize that all of their info is already online. Also this website is used by some big name banks (BOA, citi, etc…) so it gives them some credibility.

  31. kellie says:

    Austin -

    MS Money does allow you to set up spending areas you want to watch closely. I do this with my groceries and dining out. Therefore, I am able to see what I budgeted for those categories and how much I have left as soon as opening up MS Money. Also on the front page you can show your budget and see what categories are out of budget at first glance.

  32. Jonathan says:

    I have begun using the free, open-source GnuCash (www.gnucash.org). So far I haven’t had any problems with it, although I haven’t had to do anything to complicated so far.

  33. Chris says:

    I use MS Money. I haven’t had any experiences with crashes that are in recent memory and I’ve been using it a long time. I used to really love the fact that Money had a free version for my pocketpc so that I could enter transactions on the spot, but alas, my pocketpc is dead, so now I just use the voice recorder on my cell phone to record transactions for later processing, GTD-style.

    One benefit to using Money for me is after you have used it a while, you can get a history of your spending. When my wife and I started a budget, it was easy for me to know how much I should budget each month for gasoline with just a click or two in Money. It was much harder for her since she had to look through her checkbook (and archived checkbook registers) to try to guess how much she spends on gas, especially difficult since her checkbook doesn’t support categories and sub-categories. I will say that for budgeting we don’t use Money since she still doesn’t use Money, and we had to come up with something very customized, so we use OpenOffice Calc for the budget.

    In any case, you should use what you will use, because it doesn’t help to have powerful software if you find it too difficult to use.

  34. Michelle says:

    I’ve used Quicken for over ten years — since before online synchronization was available. I don’t even use the online stuff — I just enter transactions as they occur and reconcile when the statement comes. It works great for me, and the upgrades aren’t a problem because I don’t do online.

    I may be missing out on some features, but my finances are pretty stable and in good order so it’s not really a problem.

  35. Jezebella says:

    Open Office Calc for me. One spreadsheet tracks received income (salary & other, but not interest or IRA), and expenditures by category, with a monthly net at the bottom of the column, and average monthly expenditure at the far right. I include credit card expenditures here even though they aren’t, strictly, “outgoing”.

    The other one tracks debts each month(balance, total charges including interest, and payment for each) and savings balances (including retirement acct.). Easy-peasy.

  36. mjc says:

    I have never used Quicken for windows, but Intuit’s support for the Macintosh version of Quicken is almost criminal. The features in the lastest upgrades have been laughable. And they force upgrades after 3 years by not supporting the download formats. It’s the perfect example of a monopoly reducing innovation.

  37. Marcus Murphy says:

    Shoebox records. Really only useful if you run a home business and print receipts etc. Basically the feature that I really like is you can scan in your receipts and link them to the line items in your software so that you can keep track of all of them without having to spend hours stapling and filing. Forget the paperwork and make your life easier =)

  38. Doris Denbow says:

    Are there any Money Matters software users out there who have come up with an acceptable replacement for it since it was “dropped” and replaced by Money Matters 2005, which was then dropped and replaced by Money Map? It was a terrific program, which I am still using, but since it is no longer supported and cannot be loaded on Vista, I am looking for an acceptable replacement which does all the wonderful envelope system functions that it offered. Or, if you switched to Money Matters 2005 and eventually to Money Map, have they improved to a point where they are an acceptable replacement for Money Matters?

  39. Joel says:

    Doris, I gone from MoneyMatters Deluxe to MM2005 and then to MoneyMap. MoneyMap is a much better improvement over MM2005. However, both MM2005 and MoneyMap are programmed using Java which, for some reason, is slow on a lot of people’s system, including mine. Some times the program will sit there, displaying the splash screen for 3- 5 minutes before the program will do anything. However, I feel that MoneyMap is a great improvement, is pretty easy to understand and let’s me budget and see where my money is going. It’s much better than it’s predecessor MM2005. I find the reports most informative.

    I have to say that I am intrigued by YouNeedABudget (www.youneedabudget.com) since it’s set up to allow a person to live off of the previous month’s finances (Rule #1), however, until the program incorporates account tracking and the ability to reconcile, I probably won’t be using it until then. However, for those who feel they just need a simple budget then that is a good program.

  40. Will says:

    I get your point but really like Quicken. I use it mainly as a souped up checkbbok/registry. I can “plan” ahead by entering transactions in my checking account registry as I expect them to occur and then visually see where cash flow problems will occur. Often times the solution will be to wait a day to pay a bill or transfer to/from savings.

    Additionally, I use the one-step-update to download all my transactions accross bank, credit, and brokerage which really saves time. If you’re like me and travel for business it’s really nice to be able to code a CC transaction as “reimburseable” when you fill out expense reports.

    You’re right however in that most of Quicken is too complicated and bloated.

  41. Quarib says:

    I have tried Quicken & Money, but never found too much use for them personally. However, I have used mint.com and that has worked really well. It’s a complete financial website.

    I used it for a little bit and now I don’t use it because I don’t have online access to some of my accounts. You need online access to all of your bills it seems to properly use the website.
    When I can figure out some free time, I’ll try setting up Excel. Good thoughts.

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