smart spending

4 benefits to desktop money management

Highlights
  • Desktop programs allow you to slice and dice your spending habits.
  • Users can start simply and add more detail as their finances grow complex.
  • Desktop programs can provide a sense of security that's lacking online.

If you're one of the millions of people who are looking to get a better handle on their finances these days, you have plenty of options, from the old-school pen and paper to new online money-management sites.

However, an often overlooked middle ground is desktop programs. From behemoths like Quicken and Microsoft Money to more specialized programs like You Need a Budget Pro and Crown Money Map, these programs offer features you won't find in other places.

Microsoft stopped selling its Microsoft Money program June 30. But the company will support the program through Jan. 31, 2011, and Microsoft points out that Money continues to have functionality on the desktop.

With at least four financial programs in use, here's why you may still want to consider desktop money management for keeping track of your finances.

Pros of desktop money systems
  1. Customized reports, robust features
  2. Scalable programs
  3. Security
  4. Coordinating your money

1. Customized reports, robust features
Instead of relying on one-size-fits-all tools, many desktop programs allow you to drill into your spending, and slice and dice it in a number of different ways, says Get Rich Slowly blogger J.D. Roth of Portland, Ore. "You can create and customize reports that allow you to see which categories you spend money on, and break those categories down into monthly, quarterly or yearly subtotals," he says.

Such tracking helped him notice that his spending on music and DVD downloads had crept up from $10 a month to more than $80. "It's something you might not notice in your day-to-day life when you're downloading a song or a TV show here or there. But the (reports) help you see when you're developing a habit," he says.

There are other robust features with desktop money management. You can link to your scanned checks or receipts, which will allow you to keep everything in one place and discard the shoebox you might otherwise use to keep your physical receipts. One version of Microsoft Money also provides stock market updates and Morningstar ratings.

If you do a lot of international travel, some programs, including Quicken and You Need a Budget Pro, work with multiple currencies. Some will even create customized reports that will use current exchange rates to let you see how much your foreign transactions are costing in your home currency.

"For people who are detail-oriented and who are willing to take the time to put good information in the system, they'll probably find that they can get more useful information out the back end," says Wendy Barlin a certified public accountant with Barlin's Business Solutions in Encino, Calif. "Those who really commit to the system are going to benefit from it."

2. Scalable programs
While desktop budget planners can offer a huge array of bells and whistles, sometimes people really just want the addition and subtraction features, at least when they're just getting started, says Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling in Silver Spring, Md.

"Too much analysis can be as bad as too little," says Cunningham. "You don't always need to divide the money you spent at the theater into the price of the tickets and the price of popcorn. It can be a bit much for people."

Desktop programs allow users to start simply and add more details as their interest grows, or as their financial situation becomes more complex.

One of the add-ons is greater visual data. Spreadsheets and lines of numbers can be daunting, says Barlin, which is why she recommends Quicken to her clients. The program can turn almost any string of numbers into a chart or graph that can be easier to understand.

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"Instead of just looking at financial statements and profit and loss statements, you can see pie charts, for example," she says. "That visual aspect makes it very user friendly."

While many online programs also have the capacity to turn numbers into charts and graphs, few offer the kind of versatility found in desktop programs, says personal finance expert Liz Pulliam Weston, author of "Easy Money" and "Your Credit Score," and a personal finance columnist for MSN Money.

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