The Good And Bad Of Microsoft Money And Quicken – And Why I Usually Point People Towards A Spreadsheet Instead

Perhaps the most common question I get from readers is what about Microsoft Money and/or Quicken? Do I recommend them to people, and if so, which one of the two do I really recommend?

First of all, Money and Quicken are both excellent packages for what they do. If you want to track your personal finances in great detail, both packages will certainly do the job, providing countless reports and views of the data.

When I first went through my financial meltdown, I tried both packages for a short time, first trying out Money via Microsoft’s free trial of the product, then trying out Quicken using a free copy that came with my computer. I did not feel that one package had a huge advantage over the other – in fact, they felt pretty similar to me. I liked Microsoft’s data views somewhat better, but I had more difficulty connecting to my accounts with Money – but, honestly, they both did the job just fine.

So why did I stop using them? They were overkill. I sat down and thought about the time I was spending entering information into the program, appropriately categorizing all of my spending, and looking at reports, and I realized two things.

First, it wasn’t a good use of the time. Sure, I could see areas where I was spending a lot, but almost always my own mental accounting told me where I was spending too much. I also had a great picture of my month-in month-out money flow, but it was a lot of work to get this picture.

Second, I could be doing a lot of other things with that time. Like, for example, working on The Simple Dollar or working on my computer consulting business or spending time with my family.

Another nit that bothered me was the regular bombardment with what amounted to ads. I was constantly being introduced to mutual funds and other financial products that “matched my financial picture.” I’m really not interested in being served up ads by a program that I paid for (or, in Money’s case, was using on a trial basis to decide if I wanted to pay for it).

There’s another problem: both of these programs are on a constant upgrade cycle, which means roughly every three years, it ceases to function and you have to upgrade. Why? It ensures consistent product purchases from people who are actually using the program.

Eventually, I figured out that the one feature I really liked and that kept me on track was the constant updating of my net worth – I felt motivated to keep it moving in the right direction. So I just built my own in a spreadsheet exactly how I wanted it and moved on to just using that. I couldn’t be happier – it’s very easy for me to update and I don’t have to worry about upgrades or any other issues that Quicken and Money introduce into the equation.

Here’s my serious recommendation if you’ve never used either package and are interested in trying one out. Try out Microsoft’s free trial of Money for 90 days and see whether or not you’re still using the program after that period – this will let you know whether such software is actually useful to you. If you are still using it, then spend a bit of time and research both Money and Quicken to find out which one works for you (Quicken will import all of the stuff you set up in Money quite easily).

It wasn’t quite my cup of tea (though I am considering giving Quicken ’08 and Money ’08 detailed run-throughs for future posts on The Simple Dollar), but it might be yours. Give it a shot and find out.

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