December’s tip of the month is a simple piece of advice that can kickstart any individual or business into the New Year.  Several years ago, I had a couple in their 60’s that came to a seminar I presented on retirement planning.  Since client names are confidential, we’ll make up a name and call them Dr. & Mrs. Smith.   They requested to meet with me personally after the seminar.  When we met, I asked why they wanted to meet and what they wanted to cover. Mrs. Smith related to me the following story.  She stated that recently Dr. Smith had received a call from their banker.  This was before banks had automatic overdrafts and the banker was making a courtesy call to let Dr. Smith know that he had covered checks that he had overdrawn on his account.  Dr. Smith’s comment was “how can I be overdrawn, I’m making over $50,000 per month!” 

            For years, Dr. Smith made enough money that he never worried about how much he was spending or where he was spending.  But finally his spending had gotten out of control.  After a detailed analysis of Dr. & Mrs. Smith’s financial life, there was a simple solution to start solving their money problem: create a budget.

            Working with a financial professional can make the process of creating a budget simpler, but with current technology anyone can use this powerful tool to get his or her financial life in order.  There are two software providers I like that offer reasonably priced software programs that will help you create a balance sheet among many other financial planning tools.  They are Microsoft Money and Quicken.  Each software program allows the user to download their banking information and then create a budget as simply or complex as desired.

            To help you get started here are links to Microsoft Money and Quicken.    Just click on the name and you’ll be taken to the respective company’s site.

 Quicken and Microsoft Money each offers a variety of options: Standard, Deluxe, Premium plus Home and Business packages. The Standard packages cover most of the basic personal finance software needs of users.  As you step up to the different versions you get more benefits.  Higher versions include more investment and tax management capabilities.  And if you run a small business, the Home and Business Programs help to manage and budget.

One primary difference I found between the two vendors is that Microsoft Money is strongly Internet based requiring users to store their financial information online.  While Quicken offers the same type of online service, they also allow users to operate Quicken offline as a freestanding program.  If you work with an accountant or financial planner, ask them their preferences.  Their preferences may be strongly tied to the way they help you manage your money.  If you haven’t used either package, check with your bank to see if they have a preference on which vendor they can service.  The only bad decision on what software package to use is no decision at all.  If you’d like to discuss your financial questions with an experienced financial professional, give us a call.  Contact Us  

Below is a table comparing the 2006 Deluxe version from Microsoft Money and Quicken.  This chart may not cover respective vendor updates.  We suggest that you investigate each vendor and form your own opinion.