First Look at Microsoft Money 2005

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Simple View of Transactions
Simple View of Transactions

Just one week after Intuit introduced Quicken 2005, Microsoft is striking back with a new version of its competing personal finance program, Money 2005.

Like Quicken 2005, Money 2005 isn't an essential upgrade for most users. But it does hold special appeal to people who would like to manage their finances on the Web when they're not at their desktop.

Money is scheduled to ship in September in four versions: Standard ($30), Deluxe ($60), Premium ($80), and Small Business ($90), which correspond roughly to Quicken's Basic, Deluxe, Premier, and Premier Home & Business editions. Standard provides basic checkbook and expense-tracking tools; Deluxe adds a host of planning features; and Premium has additional features for serious investors. The Small Business version lets you track finances for personal accounts and for a sole proprietorship (Schedule C on a federal income tax return).

Thanks to a major overhaul of its underlying technology, Money 2005 can automatically synchronize account data in the desktop application with your Web-based MSN Money account. As a result, entries in the desktop software will automatically appear online, and vice versa--a huge convenience for people who update and review their finances from different locations via a browser.

Another neat change: People who want to share access to an MSN Money file--for example, a married couple--can log in from their individual .Net Passport accounts.

Read the Fine Print

But there are some caveats to managing Money online. First, to set up an MSN Money account, you must first sign up for a .Net Passport account from Microsoft. Second, you have to be comfortable with the idea of storing your financial data on Microsoft's servers. Third, of course, you have to be online when you use Money.

Last and perhaps most important, though the account is free, Money 2005 will provide online services of any kind--including downloading transaction data from financial institutions to the desktop application--for only two years. After that, you must upgrade to the then-current version of Money to continue using the online services.

Even if you don't upgrade, you can still use the software; and if your bank, brokerage, or other institution will let you download transaction data in .qif files, you can even avoid manual data entry by importing those files into Money. But you won't be able to get fresh stock quotes, sync with MSN Money, or download transaction data automatically from within the application (another great convenience for most personal finance software users).

The two-year window for online services represents a reduction from the last few versions' three-year window. Historically, Intuit's window for Quicken's online services has been a bit longer. For example, the company stopped providing them for Quicken 2000 only in May of this year. Intuit has not announced what its policy on discontinuing online services will be for later versions of Quicken, including Quicken 2005.

If you don't like the idea of mirroring your financial accounts on MSN Money, you don't have to. When I upgraded, the feature was turned off by default; I had to go to Tools/Settings to set it up.

Hands-On Money

Transaction Details
Transaction Details

I tried out the Web synchronization with a shipping copy of Money 2005 Premium, and for the most part it worked as advertised. Synchronization appears to occur whenever you shut down or launch the desktop application. Not all information is synchronized, and you can't edit all of the entries online: For example, I couldn't fill in a payee for a check that I had downloaded into the desktop app with the payee not identified.

I was able to categorize each expenditure, choosing from a drop-down list of categories that seems to have been downloaded along with the transaction date. Missing, however, were categories for expenditures that represented transfers between accounts; for example, a credit card payment was listed as "uncategorized."

I also noticed that the Web version of the accounts listed transactions that were not marked as cleared on the desktop version separately from those that were cleared. These uncleared transactions were called adjustments, and to add a new transaction--say, a credit card charge--the user simply clicks an Add Adjustments link. I tried this, and--sure enough--the next time I opened Money on my desktop, the transaction appeared.

Other Changes, Observations

In most respects, Money 2005 closely resembles its predecessor. But the new version does change a few things to make the software less intimidating. Setup doesn't push you to enter each and every account; you can jump in and start using the software right away, though you'll get more out of it if you track all your accounts.

A new default register view displays only the basic information of a transaction: check number (if applicable), payee, date, amount, account balance, and whether the transaction has been reconciled. The traditional advanced view, which shows categories and memos, remains available as a display option.

Money continues to compete vigorously with market-leading Quicken: Both are mature, capable products; and for the most part, the differences in usability are trivial. I also applaud both for eliminating the partner logos that have dotted home screens on some recent versions (though I still had to delete a bunch of desktop shortcuts to offers from Quicken and Money partners that appeared after I installed the programs).

Most current users who want to upgrade will be happy with the new version of their existing package. Some Quicken users might find Money 2005's Web synchronization capability sufficiently compelling to consider switching--but these folks should be prepared to upgrade their version of Money every other year.

Conversely, Money 2005's two-year upgrade requirement window for continuing online services might prompt some Money users who like to keep their software longer than that (and who can live without Web synchronization) to take another look at Quicken.

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