The New Microsoft Money Budget Tool

Microsoft released Microsoft Money 2007 for download this week with in-store copies arriving on the 27^th. I started with the trial version, but have since downloaded a full version. They've changed to a special online seller so people who had problems in years past should not have them.

The big change I read about on the boards was that they added the ability to identify investment types (i.e. stock, mutual fund, bond, etc). From what I've heard, serious investment trackers are excited about this. I'm not sure what the benefit of that is since I’m not really well versed in investment tracking.

For me, the big change I found the budget overhaul. I popped over to the budget as was pleasantly surprised to see I was asked if I wanted to try the "spending and savings budget". Ooooooo.

The new version definitely works better for me. The bills are now not displayed in the budget setup. Some people want it with bills included, and some don't. I'm from the don't category.

You'll never be able to please everyone. Why is this change good? Deleted scheduled bills sometimes left traces in the budget and caused limits to be wrong. Some bills you didn't want on the budget. I used certain bills to simplify data entry so that just complicated the issue.

The expense and income groupings were also changed. Now there's an income group along with the committed, fun and irregular expense groups. These are set in stone. You cannot rename them or add new ones. I wish I could change the name of the fun group to "spending money". That's ok and I'm working with that.

I use the committed expense category to hold all my payroll deductions. This way I can collapse the group since I don't need to see these amounts on first glance. I use irregular expenses for all my known expenses – parking, train tickets, car insurance, food shopping, etc. Now they really aren't all irregular expenses but it keeps them in one easy-to-find place. The fun group holds my spending for everything from snacks to clothes to software. I set a limit for the group overall and the let it fall to the different categories because I don't limit the specific per-category spending in this group. Keeping within my allowance is a whole different story.

And then there's a grouping called Savings & Debt. This is huge. This budget version will allow you to specifically track how much you're saving each month to an account. So it's probably easier to have a separate account per savings goal. With the online savings accounts like INGDirect and EmigrantDirect, opening up a new account is not a big deal – and you’ll get paid better interest too. The budget is tracking the net contributions to the included accounts. So I can say that I'm going to save X-dollars to Savings Account #1 each month. I think of any interest is just gravy. But with their calculations, interest is also included in the net contributions, which the budget thinks I've overspent my category due to the interest. I can work with that since I've setup bills to help me keep on top of my savings transactions.

Finally there's a Retirement group to allow you to specify how much money you'll be saving per month towards your retirement. I use this to track my IRA savings. Tracking my 401k contributions proves to be complicated for some reason, so I just track that as a payroll deduction. I'm sure there's a better way to do things, but I'm more concerned about making my IRA limit per year right now.

A few additional thoughts. In the previous budget tool version when you were adding new categories to a group, you could select multiple from the popup window. Now you can only choose one at a time. It slows down the initial setup some. I spent some time this morning reorganizing my categories because to work with the previous budget version I lumped things a little more than necessary so I could control spending limits on groups of categories.

Initial setup was a little slow for me. I sat down with a spreadsheet to figure out my paychecks (I get 2 amounts depending on deductions) and expenses. I set aside some money each month for different semi-annual and quarterly expenses. Once I figured out how much is associated with each month, things went smoother. I'm going to think a little hard to see if I can figure out how to track expenses paid with saved money a little better. But for now, I'm feeling like I'm on a better track.

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