Show Me the Money
Personal finance solutions that can keep you solvent.You don't jump from planes without packing a chute, or climb sheer rock faces without rope and safety harnesses. And when you're dealing with important things, such as your retirement and general fiscal health, and sending the kids to college, you can probably use some help as you navigate murky fiscal waters and stay financially afloat.
For this, personal finance software, such as Microsoft Money 2000 Deluxe and Intuit's Quicken Deluxe 2000, offer tools that help you bring your financial house into order and keep it that way. Both are solid, competent financial programs, and despite the copying that each has done of the other, each has its own distinct look and feel. In this latest round, much remains the same in each of these two titans of personal finance, but there are also enough differences to bring on a new leader.
Personal finance programs help you with a variety of money-related tasks. They allow you to manage and balance your checkbook; monitor and update your investment portfolio using prices from the Web; create and track budgets; understand your progress through reports; view timely Web-based data; and calculate and plan for your financial future—buying a house, retiring with security for the golden years, and saving enough money to send the kids to college. You can also use these programs to work with your existing bank accounts to update transactions within their registers, and more—however, your bank has to support them.
Besides having a first-rate personal finance package in your corner, you'll want to work with a financial institution that offers low-cost and convenient Web services, and pays competitive interest rates. For this reason, we also investigated a number of banks for their Web-based banking services, a topic covered in the second part of this article.
When you use a solid personal finance program, you have the tools to adequately plan, budget, and invest in your rosy financial future. And with the right bank, you'll have the convenience of being able to conduct much of your banking at home, via a computer. This kind of solid financial planning is like having money in the bank.Microsoft Money 2000 Deluxe
Microsoft has long been working on its Quicken-killer program, and after all those years of trying to catch up, Microsoft Money 2000 Deluxe is finally poised to upset the king. While the result doesn't necessarily slay Quicken's dragon, it's a powerful program that gives its rival a run for its money. Microsoft has beefed up Money's planning modules, and improved its investment features and Web integration. And now, Money is ready to tackle Quicken's long-held tax advantage by working with TaxSaver, Microsoft's upcoming tax preparation software.
Money has adopted a new feature that first appeared in last year's Quicken: you can now use a Money Express program to enter transactions without starting the complete Money software program. You can also set it to alert you to upcoming bills. Using Money Web Express, you can use any computer that has Web access to see account balances, enter transactions and obtain financial reminders—and these new transactions will appear in your Money 2000 files.
Money has always offered a strong investment portfolio, and new features let it handle splits and mergers, as well as track bonds and CDs. You can graph market indicators, such as S&P 500, Dow Jones, and Nasdaq and view them against investment performance. Money also considers such criteria as commissions, vested amounts, and 52-week highs and lows. Compared to Quicken's investment tracker, Money offers more preset views and more options for customizing these views. The Portfolio Review offers a ready view of your portfolio that includes best and worst performers, recent transactions, charts, and more. The only downside is that Money asks you to do more than Quicken does to adjust a portfolio's asset allocation.
To plan for retirement, college, or major purchases, Money 99 rules. Its Money Lifetime Planner is easier to use than Quicken's planning tools, and it builds a single plan that encompasses your total financial life. This year's version of the planner can evaluate life insurance, and includes a Purchase Wizard that offers strategies for financing big-ticket items by calculating and displaying monthly payments. Money's unified planning approach is best for most users, but those who want to quickly check out a single area—retirement, for example—may become frustrated by the lengthy entry process.
Money takes a clear shot at an area that Quicken clearly owned in the past by offering tax planning features that can estimate capital gains and find potential deductions. The ultimate prize, however, is its integration with Microsoft's upcoming tax preparation software, TaxSaver. However, since TaxSaver's capabilities and ease of use remain an unknown at our press time, the tax edge, for now, still goes to Quicken, which has a proven relation with the popular TurboTax, Intuit's first-rate tax preparation software.
Money's interface does an excellent job of integrating content from the Web, to the point that it's often hard to tell what information is part of the program, and what came from the Web. When you're updating transactions and investment prices, Money can download and synchronize information in the background. The best part is that Money's considerable Web features are now free. Gone is the $9.95-per-month charge that kicked in after a six-month free-trial honeymoon. So Quicken, which didn't charge for Web data, has lost a major point in its favor.
The interface is a Web-style home page, which displays in basic and full modes. The basic mode gives you a few key options, including working with accounts, scheduling bills, and others. The full mode displays a vast set of options—account information, investment values, charts, and more. If these views don't suit you, you may customize a page as you wish. The program also features financial centers that group common tasks and information around topics such as investing, planning, and taxes, so you may easily work with them.
A new automatic categorization feature competently suggests categories for bills—and now you can finally enter payments directly into the check register. However, Money still relies on a form, not an on-screen check, for entering check transactions. In general, Money graphs are big and colorful, and do a great job of highlighting a parameter as you move the mouse's cursor over them. It's easy to associate the pop-up value, or select the graph parameter for a closer look.
Money takes the time to perform a thorough setup—it asks you a lot of questions, using clear forms on which you enter your account information, and select and check-off different parameters. It also offers explanations via video sequences. The comprehensive setup process takes about half an hour. While Quicken offers its own easy setup procedure, Money's approach is better for novices who are new to finance programs. On the other hand, experienced users who want to dive right in may get frustrated by the lengthy setup.
While there's nothing significant that you can do in Money that you can't do in Quicken, Microsoft Money 2000 Deluxe is now the more elegant program. It's easier to use, offers stronger Web integration, and does a better job of configuring itself for users. The only questionable area is tax preparation, and we can't comment on this until the release of Microsoft's TaxEasy (scheduled early in 2000).Quicken Deluxe 2000
While Intuit's venerable Quicken has hardly been running in place in its race with Money, most of the changes in Quicken Deluxe 2000 are minor. Quicken's investment center remains much the same, but adds enhancements: employee stock-tracking options; investment alerts for insider buys and sells; new broker research, and earnings announcements; and a powerful utility that charts multiple securities alongside popular market indicators.
A new portfolio value and a cost-basis graph help make sense of how a portfolio has changed over time, relative to its cost basis and gains. The Stock Evaluator, a useful feature, works with the Web to evaluate investments, and even includes Morningstar ratings for mutual funds. The best new feature is a powerful asset allocator that helps balance a portfolio to meet your goals, and compares it against model portfolios.
Last year, Quicken 99 saved its most powerful planning modules for its higher-priced Quicken 99 Financial Suite. This year, Intuit includes the full planners in Quicken. With these, you can plan for retirement, buying a home, saving for the kids' education, and more. But while you can run through each planner separately, you don't get an overall life plan, such as the one that Money provides. This is both good and bad. Quicken's approach lets you quickly enter data and come up with a plan, while Money's approach takes lots of time to answer questions but offers a more complete fiscal planning picture. Within the planners, Quicken's interface isn't as elegant as that in Money, because its text pops up in annoying dialogue boxes that cover the information underneath.
One area where Quicken maintains a lead is in tax planning, mostly because of its ties with Intuit's proven TurboTax. New tax alerts in Quicken keep you posted on capital gains and remind you of important tax dates. A new Itemized Deduction Estimator shows you how deductions affect your tax bill. The Tax Withholding Estimator determines whether you should adjust withholdings on your W-4. This is helpful because no one wants surprise payments and penalties on April 15th, or to give the IRS an interest-free loan.
This year, Quicken sports the same Web-style interface that it introduced last year. When writing checks, Quicken's checkbook-style interface is easier to use than Money's. Also, you can now conveniently sort registers by clicking on column headings. Quicken provides plenty of preset reports that are easy to call up. New Financial Activity Centers, which are essentially home pages for banking, investing, household, taxes, and planning, offer information and activity links to work in each area. The program lets you customize these pages to display alerts, charts and graphs, and show data from the program as well as from the Web.
Quicken offers fewer Web links than Money does, and its Web content isn't as tightly integrated into the experience of using the program. There's an interface glitch, too—Quicken features two sets of forward and back arrows when displaying Web data. Besides featuring the latest investment prices and displaying timely information, the program can now download home and car values. Now that Microsoft's Web content is free, Quicken's past advantage in this area is no longer a factor.
To set up the program, Quicken does a good job of asking preliminary questions and then creates the necessary accounts. While this approach gets you working in the program sooner, Money's more thorough approach means that there's less to add later—it covers the bases so you're off to a better start. We didn't necessarily enjoy answering all the questions that Money threw at us in the beginning, but it's clearly the better setup.
Quicken Deluxe 2000 has hardly sat on its laurels, but this year its bitter rival has finally caught up. Quicken is still stronger on the tax side (until Microsoft can prove otherwise), but its Web integration, planning, and setup are slightly weaker. Quicken remains a competent personal finance manager, but it has lost its lead on Money.
Bottom Line
You can rely on either Microsoft Money 2000 Deluxe or Quicken Deluxe 2000 to manage your finances. If you already use one, you can stick with it, as there's no compelling reason to jump ship. But overall, with the exception of the big tax question, we recognize Microsoft Money 2000 Deluxe as the photo-finish winner in a tight race.Web Banking
Just as automated tellers have all but replaced live bank tellers, Web banking services will change the way we all work with our money. Using Web-based banking services, you can transfer funds from one account to another; pay bills online (the bank sends the payment for you); and view recent transactions and up-to-date account balances—all useful services that you can control from the privacy of your home, using any computer with Web access. And you can do your online banking any time during the day or night.
For now, online banking is in its infancy, and financial institutions are approaching the Web in different ways. The established major banks seem to be largely dabbling on the Web, offering online features that complement the services they offer at their local branches. The new Web banks, on the other hand, eschew brick and mortar—you visit a Web bank via your Web browser, and perform almost all your transactions online.
Web banks let you open new accounts and apply for loans online, and integrate their online brokerage services with your accounts so you can buy and sell stocks and mutual funds. Because a Web bank doesn't have to pay for an impressive building, they save money, and, at least in theory, can pass these savings on to you. For this reason, you can usually expect a higher return on your money when you deposit your money in a Web bank.
Because no one has yet found a way to send cash across the Web, you perform your withdrawals at local automated teller machines (ATM) that the Web bank supports. Web banks vary in the number of ATM networks that they support, so there may or may not be a suitable ATM near you—a major consideration when you're choosing an online bank. To make deposits, you have to send your checks through the mail (you can't deposit them at an ATM), or rely on direct deposit. This is the biggest drawback to a Web bank.
We evaluated a couple of traditional banks with Web services, along with Web banks for the breadth of their services, their rates of return (we used a benchmark of $5000, and in the case of a CD, a duration of 12 months), their ATM networks, and support for Quicken and Money. Regardless of the bank you choose, those infamous "banker's hours" are largely a thing of the past.American Express
This banking site is part of the American Express family, but it's not completely integrated with the rest of the financial powerhouse's services. There are no direct links to the company's online brokerage services, and you can't pay your credit card balance online, unless you sign up for the bill-paying service.
American Express offered a decent rate of 5.83% on a CD (all of the rates here were taken on a single day for comparison—as you know, they often change on a daily basis), a competitive 4.88% on a money market account, and an adequate 1.98% on interest-bearing checking.
The company's ATM network is comprehensive—it's likely that there's an American Express-supported ATM near you. If you do incur ATM transaction fees, American Express reimburses you up to $6.00 per month. The bank offers free unlimited bill payment service, and you can download files from the site to update your Quicken or Money registers. Overall, American Express offers a competent way to go, but if you want higher returns there are others options available.Bank of America
This big-time financial powerhouse offers decent services for making online account transfers, but its Web presence exists mainly to support the branch accounts, and doesn't tie in with the company's online brokerage. In a sense, though, you get the best of both worlds---24-hour banking is available, but when you need to make a withdrawal or deposit, there's always a branch or ATM near you.
The unfortunate side is B of A's paltry rate of return on your money. Bank of America had among the lowest returns—only Wells Fargo's rates were lower. In our survey, the bank paid 4.88% on a 12 month CD, a low 1.50% on a money market, and 0.40% on an interest-bearing checking account. You can download files from B of A in order to import transactions into Quicken and Microsoft Money. Unlike the others, Bank of America charges $5.95 if you want to pay bills online, unless you have a combined balance of $10,000, or rely on direct deposit. Look elsewhere if you want a decent return on your money, but there's definitely convenience to banking with this huge company.Citi-fi
Pronounced "see tee ef eye," this Web offshoot of powerhouse Citibank is the best blend of a big, well- known financial institution and a Web bank. Its return on a CD was 5.50%, which was lower than returns from the pure Web banks, but much higher than those of the other big-name banks. Return on a money market account was a respectable 5%, but the bank offered no interest-bearing checking accounts. It does provide free, unlimited bill payments, and you can work with its online brokerage account to trade stocks and mutual funds at a reasonable $19.95 per transaction. While it offers no associated credit card, Citi-fi supports a decent number of ATM networks, so chances are good that you can find an ATM near you. You can download a file in order to update the registers in Quicken and Money. In all, it's a decent blend: the services of a Web bank, and the convenience of local ATMs.NetBank
This is what Web banking is all about. Making good on the promise that low overhead translates into higher returns, NetBank offered the highest return on a CD at 5.98%—more than a point above rates offered by Bank of America and Wells Fargo—5.12% on the money market account, and 3.93% on its interest-bearing checking, nearly twice the rate of the next highest return.
NetBank offers an online brokerage that charges $25 for up to 2000 shares ($0.015 for every additional share). It provides unlimited online bill payments, and a credit card that you may pay online. The only downside is that there's no support for Quicken or Money, and the bank's network of ATMs is thin. But if you want the highest return you can get on your short-term cash and experience Web-based banking, check out NetBank—that is, if there is an ATM near you.WingSpan
Because of its heavy media campaign, WingSpan, an offshoot of Bank One, is the best known Web bank. While WingSpan offers a bevy of solid Web-based banking features, its returns are lower than those of NetBank. WingSpan offered a solid 5.85% on a 12-month CD, a rather low 4.5% on its money market account, and only 0.5% on the checking. You can use WingSpan's online brokerage services to trade stocks and mutual funds at a reasonable $19.95 per 1000 shares ($0.02 per additional share). WingSpan offers a credit card, as well as unlimited free bill payments.
Wingspan's ATM network includes ATMs at all Bank One branches, as well as those on major networks. If you receive ATM charges, the bank rebates up to $5 per month. You can also download files from WingSpan into Quicken or Money to update your registers. The returns aren't nearly those of NetBank, but WingSpan offers all of the services that you would expect of a formidable Web bank.Wells Fargo
Their coaches may have tamed the wild, wild West, but this bank's foray into the online world does little to tame the wild, wild Web. Among the banks we researched, Wells Fargo offered the least return: 4.55% on a CD, 1.50% on a money market, and 0.40% on its checking account. The bank offers solid brokerage services that cost $29.95 for up to 1,000 shares and $0.03 per share thereafter. You can also pay your Wells Fargo credit card online, as well as update your register in Quicken or Money by downloading a file.
Wells Fargo offers 25 free bill payments each month, and charges $0.40 for each one after that. Like Bank of America, Wells Fargo has an extensive network of branches and ATMs, and its Web services exist mainly to augment those at its branches. The online services aren't bad, but the returns are poor.If you're ready to try banking on the Web, NetBank, a pure Web bank, offers a competitive assortment of services and the highest rates of return, but no support for Quicken or Money. But before you sign up, be sure that there is an ATM near you and that you know what it may cost to use it. And if you want to stay with a big bank, you'll find that their online services offer convenience, but give you paltry rates.
909-593-9675 e-mail:wkawamoto@earthlink.net