As a Christmas present, my girlfriend’s mom gave me a copy of MS Money. My family knows that I’ve turned over a new leaf and am now trying to be fiscally responsible, which implies that I understand where my money is going. Microsoft advertises Money as personal finance program to track your spending, create budgets, manage your brokerage account, etc. Installing Money was fairly straight forward. Insert the CD and off it goes. After that, things got a little complicated as I’ve never used Quicken, Money, or any other personal finance program.

The package MS Money came in did not come with a user’s manual. Microsoft does supply a manual on-line which I used at first, but wasn’t too very helpful. I went down to Borders and bought a copy of Microsoft Money for Dummies. It took a few tries, but I was able to setup my checking and savings accounts. Washington Mutual works with MS Money to update the check register and mark which transactions have been cleared. To update my ING accounts I have to log them into the register manually or log into ING and pull an MS Money file for each account. ING claims this is for security reasons. At the moment I’m using the MS Money account register just like I would normally use the paper one in my check book. I input the day’s transactions like I normally do. Everything seems to be balanced.

Money allows you to categorize your withdrawals and deposits. This allows the tool to automatically generate reports to show you how you are spending money. It took me a few tries but I got everything categorized and was able to make a nice pie chart for my December expenses.





Before anyone attacks, the entire “Entertainment” category is not me. I am reimbursed for most of it. This chart just shows expenses. “Hobbies/Leisure” got me good this month. I ride a bicycle (road bike type) and had to replace my drive train due to a couple years of neglect. The “Savings” category will eventually disappear. Funds I set aside for my savings account are technically transfers and not expenses. For December, they are categorized as expenses since I couldn’t get Money to work with my old ING transfers. Now that I have tracking information, I can look at the data over the next few months to see where I can cut back. My monthly income vs. expenses report looked ok but not great. I’m hoping I can use the tool to help find inefficiencies.

MS Money also allows you to schedule all of your recurring bills on the days you normally pay them out. Usually I’m scribbling my cash flow on a napkin every week to see where I’ll be at after the week's bills have settled. If you use MS Money’s “Bills” feature, you can project your future cash flow and have it illustrated in a bar graph. Below is my January forecast.



I scribbled my own forecast for January on some scrap printer paper and compared it to what MS Money output. The two are fairly consistent. This will be very helpful for me so I can better plan when to pay my bills. My paper/pencil version of January didn't account for timing my bill payments. I was scheduled to overdraw in the second week. If you’re curious about the drop to about $50.00 dollars next week, I didn’t plan December very well and overpaid my Capital One Visa. For some reason I thought I was better off than I really was. I can still make rent. I’ll just be short until I get paid next Friday. Most of my bills are due around the 14th of the month which explains the other large drop.

There is a learning curve to use MS Money. The tool is not super intuitive which required me to buy a book. Setting up my credit cards and transfers to and from my checking account to my ING accounts was also tricky. The category names for transferring money seem a little misleading. I think the names are changeable though. I’m not setting up my 401(k) or Schwab accounts in MS Money yet. I made a half hearted attempt to pull my 401(k) information and gave up when it got complicated. I have my pre-tax contributions showing up in a dummy account for now until I setup MS Money for my 401(k). Transfers to Schwab are also shown in a dummy account to prevent those funds from disappearing from my net worth calculation. I'm going to setup accounts for my car and student loans eventually. I've been little hesitant to do this since I know it will show my net worth being negative. Overall I’m pretty excited about my new toy. I think this will definitely help me get my arms around my spending so I can squeeze every penny I have.