Microsoft Money Plus Review

UPDATE:Microsoft issued a statement toay that it has discontinued MS Moneyand that the product is no longer for sale. Support will continue for the product through 2023, but no future versions will be released.

Microsoft Money Plus Deluxe is Bill Gates et al’s attempt at building a better Quicken. That means both more features than the market leader in personal finance software — and less. Did Microsoft add or subtract too much from their budget-balancing application, or does Microsoft Money Plus end up in the black? We get to the bottom line in this review.

PRODUCT OVERVIEW

Microsoft Money Plus Deluxe has everything you’d expect from a personal finance application: Direct access to most banks and financial institutions so you can import all your spending and saving data, categorization options so you can sort and track all your transactions, bill scheduling so you can keep your cash flow manageable, online bill-pay services so you can avoid writing old-fashioned physical checks as much as possible, and basic planning tools so you can set aside funds for major purchases, education, and retirement.

Bundled into Microsoft Money Plus are two other applications; one it admits to, and one it doesn’t. The acknowledged application is Microsoft Insights, which is a clever little program for your Windows System Tray that will offer you billing and saving alerts based on your preferences. Think of it as a money-management alarm clock and early warning system. The hidden application is a stripped down version of Internet Explorer, as a fair portion of Microsoft Money Plus’s features are just backdoor links to MSN’s financial Web pages, displayed — advertisements and all — inside the Microsoft Money application interface.

All told, Microsoft Money Plus is a fairly clean and effective financial management program, provided you don’t mind the program working double duty as a shill for MSN’s financial content.

INSTALLATION & SET-UP

Installation of Microsoft Money Plus and Insights took less than five minutes on a middling old Pentium 4 machine, so most users should have little trouble getting the software in place. Only two real surprises lay in store within the installation process. First, the installer wizard will alert you that Microsoft Money requires you to download updated operating system components, which is Microsoft-speak for drivers and such, but sound more intimidating than necessary. Later on in the install process, Microsoft Money will prompt you to set up a security password — and will suggest you use your Microsoft Live ID.

This, again, is Microsoft-speak, this time referring to a Hotmail or MSN e-mail address and password. So far as we can tell, the only reason to tie your Live ID account to your Microsoft Money data is so you can synchronize your stock-tracking data on MSN’s Money section. This is helpful to those that have an MSN Money portfolio (or who don’t want to remember more than one password for anything), but for the rest of us it’s just a sneaky invitation to create a Microsoft Live ID.

After sorting out your password preferences, it’s on to importing your account data.

You are presented the option of manually entering your transactions, but the appeal of programs like Microsoft Money, Quicken, and their ilk is that most financial institutions will allow you to download bank statements and stock trade data directly so you can manage your finances through a single, holistic interface. Microsoft Money handles this in a straightforward fashion, asking what type of account you’re importing — banking, credit card, or investment — and then offering you an alphabetical list of hundreds of different institutions to choose from.

We use a rather obscure credit union and maintain multiple accounts there, which is a pretty good test for the both the thoroughness of Microsoft Money’s bank roster and the deftness of its import process. After a minor hiccup with the secondary password prompt from our bank — the three security questions are based on drop-down menus that let you select which questions to answer, and the ones we had previously set up weren’t preselected, requiring us to remember exactly which security challenges we needed to answer — the process was seamless. Microsoft Money Plus handled the download with ease, locating both our checking and all three of our savings accounts and importing the last 60 days worth of data in under two minutes.

INTERFACE & EASE OF USE

Microsoft Money Plus has eight main tabbed sections that are straightforward and intuitive: Home, Banking, Bills, Reports, Budget, Investing, Planning, and Taxes. You’ll also note a decidedly Web browser-like set of forward and back buttons above the tabs. That’s because two of those tabs, Taxes and Investing, are nothing more than framed views of their corresponding MSN Money Web pages.

Subsections of other tabs also back out to MSN Money online, and thus most of the financial advice Microsoft Money offers can summed up as read our MSN Money articles and use our MSN Money widgets. This is not an indictment of MSN Money’s content; we just wish that we got a few more in-born features and analysis for the cost of the Microsoft Money software.

Once you’ve got your financial data imported, the process of labeling, categorizing, and scheduling all your bills and transactions is intuitive, if time-consuming, which brings us to the performance question.

FEATURES AND PERFORMANCE

Getting your financial data into Microsoft Money Plus be easy, but it’s only half the battle. In order to effectively manage your finances, your transactions need some metadata, and creating this metadata remains a manual process in Microsoft Money Plus. This problem is not unique to Microsoft Money; every financial planning app we’ve seen is at the mercy of the quality of your bank data, but Microsoft clearly hasn’t solved this issue.

Depending on what kind of data your bank decides to record with each transaction, Microsoft Money will either do a through or thoroughly frustrating job of automatically categorizing all your expenditures. (The day someone makes a personal finance app that doesn’tassume that Louisville Gas & Electric is a gas station is the day they get a personal thank-you e-mail from us.)

For those of us that use debit cards, this remains a particularly onerous problem. Some businesses program their card-reader systems to identify themselves in the data stream, so the local Target or Applebee’s will actually appear as Targetor Applebee’son your receipt and on your bank statement. Most businesses, however, don’t go to the trouble, and your statement gets littered with a whole lot of point-of-sale code numbers, so that Target appears as POS # 123-456-7890. Good luck remembering where you spent your money based on the date and amount of all your debit card transactions.

Worse, if you do manage to identify a point-of-sale code as a particular business, Microsoft Money doesn’t remember the translation and apply the label to past or future data entries. You have to re-label the store every time it comes up. We hope you save all your debit card receipts to shore up your bank data after the fact.

Once you’ve got all the transactions identified, you can tag them with category labels like Mortgage/Rent, Utilities, and Groceries. Microsoft Money tries to do this for you, and does a good job of labeling major chain retailers and restaurants, but the functionality hinges entirely on your bank data natively having enough information to categorize the transaction as either Groceries or Dining Out, etc. The categories are rather simple with some glaring omissions — there’s no Childcare category in the default list — but adding new and custom categories is pretty easy.

Similarly, you can schedule all your regular bills and link them to past transactions in your bank statement, so that Microsoft Money can anticipate your future expenses.

This categorization is the lynchpin of Microsoft Money’s functionality, as it allows you to track income and expenses by type, and set up alerts in the Insights application to monitor your spending and saving. Spent too much on Clothing or Entertainment in the last month? Insights will ding you on the desktop. Got a gas bill due in three days? Insights will give you a heads-up to make sure the required funds don’t get spent on Clothing or Entertainment (again).

Microsoft Money actually offers two levels of transaction-tracking complexity: Essential and Advanced. While the Essential mode does strip out several options that average users not care about — like tracking interest and dividend income — it takes away too much. For example, you can’t schedule a regular direct deposit paycheck in Essential Mode, but must label and tag any account deposits by hand. This, in turn, cripples Microsoft Money’s ability to anticipate your cash flow. Frankly, Essential mode is too simplistic for almost anyone.

Similarly, Microsoft Money offers a pair of budget-planning wizards: The Essential Budget, and the Savings & Spending Budget. The Essential Budget is good enough for most, helping you lay out how much you want to spend in each category each month and making sure that your income and bills match up. The Savings & Spending Budget is a MSN Money concept, based on their advisory principles. Basically, it creates six meta-categories for your transactions: Income, Committed Expenses, Fun, Irregular Expenses, Savings & Debt, and Retirement. The Savings & Spending Budget suggests you direct 60 percent of your income to Committed Expenses, and 10 percent each to the remaining outlays. It’s actually pretty slick, and helps enforce a moderately conservative set of fiscal habits, which can only be beneficial to most household budgets.

Microsoft Money’s reporting system is also easy to use, and offers the obligatory graph breakouts of spending by category, and will let you compare month-to-month changes easily.

For the truly devoted beancounters, you can even parse out net vs. gross income and expenses (provided you have a pay stub with itemized withholdings handy), but we couldn’t get the system to resolve our data correctly. This have been due to operator error more than a program bug, but for once Microsoft Money’s interface was not intuitive, and the whole suite of net vs. gross features proved baffling to us. Go in with a lot of time and patience if you’re committed to this level of financial tracking.

On the flipside, Microsoft Money has some especially helpful debt calculators built in, which will anticipate monthly payments for mortgages or car notes based on the amount financed, interest rate, and term. More importantly, it offers a parallel true cost calculator which will demonstrate how much you’ll pay out in total for a financed item — a painfully eye-opening experience for those who merely ask what’s the payment when determining whether they can afford an item.

CONCLUSION

Microsoft Money Plus Deluxe is a solid, moderately robust personal finance application which offers all the features the average consumer would look for in household budget software. It suffers from the same problems as virtually all such applications — it’s only as effective as the data you put in it, and setting up that data is a time-consuming, largely manual process. Once you’ve got your bank transactions input — and assuming you stay in the habit of keeping them up to date–Microsoft Money Plus does a very capable job of analyzing and organizing your income and expenses into a healthy, rational budget.

For advanced or nuanced investment, tax or retirement-planning assistance, however, Microsoft Money Plus becomes little more than a trumped-up Internet Explorer browser pointed at the MSN Money Web site. We’d have preferred fewer articles (and ads) and more tools for our money.

Bottom line: Microsoft Money Plus Deluxe will make managing your finances easier and more accurate, but if you’re hoping that Bill Gates has invented some magical technology that will get you out of balancing your checkbook, you’ll be disappointed. Microsoft Money plus will do the math for you, but it won’t do all the work.

PROS

• Intuitive interface
• Great budgeting wizards
• Simple bank data downloads

CONS

• Lots of front-end set-up
• Essential mode too simple
• Some features are just MSN Web pages