Quicken versus the Web

When it comes to personal-finance software that runs on the Mac, Intuit's Quicken Deluxe 2001 is first -- in a field of one.

Intuit finds itself alone in this category partly because the real action in personal-finance applications has moved to the Internet. That's not news to Intuit. Each new version of Quicken has shifted more of the program's functionality to the Web, where Quicken.com has become a leading site for people who want help managing their money.

But Quicken.com doesn't have a monopoly on useful finance tools, and for some purposes, those it offers aren't necessarily the best -- which brings up questions: Are Mac users still best served by Quicken 2001? Or can you do the same things for free on the Web? And if you do purchase Quicken 2001 (which, after all, is only a $60 investment, and a tax deductible one at that), does it make sense to use that program and some of the goodies available on the Net?

To find out, we compared Quicken 2001 with the best tools the Web offers. We looked at five fundamental areas of personal finance: banking, bill paying, investing, retirement planning, and taxes.

Banking

Quicken started out 15 years ago as a banking tool for checkbook balancing and other minor financial tasks, and it's still best known for its transaction-register interface, which has been polished to a user-friendly sheen over the years. There's really nothing comparable online. Entering every financial transaction in a register and then reconciling accounts at the end of the month is still the best way to monitor and control spending. It also can serve as the foundation for creating a budget (see "Digital Debt Reduction," How-to, November 2000). Nevertheless, many people simply aren't willing to invest the necessary time.

If all you want is an easy way to check account and credit card balances, talk to your local bank; most financial institutions offer some form of online banking. Of course, if your credit card and checking accounts are with different banks, you may quickly tire of jumping around from site to site.

If you use multiple financial institutions, con-sider signing up with a financial portal. The best of them connect to your banks, gather up-to-date information, and present everything in one neat package -- usually for free. My favorite portal for viewing online account information is YahooFinance, which was able to show me specific details of checks that had cleared just days before, something I could not get from Quicken.com. (MSN's MoneyCentral, at www.moneycentral.com, is also good but notoriously Mac-unfriendly. For other Web-site addresses, (see "A Personal-Finance Web Tool Kit." ) A bonus of using a personal-finance portal is that you are able to read the latest market news or perhaps check some stock quotes while you're there.

The Bottom Line If you possess the discipline to track the details of your cash flow, Quicken 2001 is still the way to go. But if you just want to know how much money you've got in the bank or owe on plastic, the Web can tell you. Even if you have Quicken 2001, it's worthwhile to connect your accounts to a personal-finance portal for the convenience of being able to check them from anywhere you have access to the Web.

Bill Paying

A major chore, paying bills is also a potential financial minefield: a lost payment can cause you to bounce a check or damage your credit rating. That may be why most people stick with stamps and envelopes. Quicken 2001's online bill-paying capabilities are relatively simple and reliable; however, its new bill-reminder features are probably more bothersome than useful. And Quicken 2001 doesn't give you the option of having your bills presented to you electronically on the Web, rather than sent by mail.

Some banks let their customers pay bills through the institution's Web site. But if you want the most features possible, consider a dedicated online bill-paying service. Especially if you're out of town frequently, such a service might be worthwhile just for the ability to review all your bills from one spot on the Web. (Imagine being able to see and pay your phone bill from an Internet café in Thailand.)

Some merchants, particularly utilities and financial institutions, can already bill you completely electronically. For others, you can have the paper bill redirected to a service that will scan it for you to see, approve, and pay on the Web. Both Quicken .com and Paytrust offer this feature, and you can use it with any bank or brokerage account for which you have check-writing privileges. With Paytrust, you can also get your bills archived on a CD-ROM at the end of the year. Both Quicken.com and Paytrust charge between $6 and $10 a month, depending on which features you want.

The Bottom Line If you're tired of writing checks, the best way to pay bills electronically is on the Web, through Quicken.com or Paytrust. Because merchants actually save money with electronic billing, you can count on having better online bill-paying options in the near future.

Investing

Quicken 2001's Portfolio feature will certainly keep close track of your investments -- calculating daily values, preparing capital gains reports, and so on. Like tracking your checking and credit card transactions, though, using Quicken 2001's Portfolio requires a significant investment of time and energy. And the more investments you want to track, the more time you'll need to spend entering dividends, stock splits, and interest payments.

If you do a lot of trading, the Quicken 2001 Portfolio feature can help you track capital gains and losses. But the statements sent by brokers provide all the investment information most people need.

What if you want to know how your portfolio is doing on any given day? Or maybe you have investments with different brokers and would like to see everything in one report instead of on several statements. How about up-to-the-minute analysis of the funds and companies in your portfolio? The Web is an ideal source for this kind of timely data, and Quicken.com offers the best portfolio features for Mac users. With Quicken 2001, portfolio data you've entered into your Quicken files now can be instantly exported to Quicken.com. Disappointingly, Intuit's recently introduced online Expanded Portfolio tool, which features even more-sophisticated interaction between Quicken 2001 and Quicken.com, is incompatible with Macs.

The Bottom Line Frequent traders and investors who relish financial details will find it worthwhile to enter them in Quicken 2001's Portfolio feature. Everyone else can get by with Quicken.com's online portfolio.

Retirement Planning

For the majority of people, the most important investments are the ones they'll someday live off of, such as 401Ks and IRAs. Quicken has a long history of helping with retirement planning; in fact, its primitive Retirement Planning calculator (still there on the Activities menu) is the financial-software equivalent of the tiny, vestigial leg bones found in some whales. Quicken 2001's far more sophisticated Retirement Planner debuted as a Quicken CD-ROM bonus feature and is now available for free at Quicken.com.

The Retirement Planner feature has two limitations: It's really just a more complicated version of the Retirement Planning calculator -- you enter your numbers once and push a button to see whether you're on track for retirement. And it does little to help you figure out exactly how to meet your goals more effectively.

The trend in retirement-planning software -- whether for a billionaire or a middle-class family with a couple of 401Ks -- is to combine real-time tracking and analysis of retirement investments with personalized advice. The pioneer of this type of planning has been Financial Engines. Its site offers free retirement-portfolio analysis using a sophisticated real-life probability technique called a Monte Carlo simulation. For $15 a financial quarter, Financial Engines also will provide specific advice on your portfolio (some companies offer the service to their employees as a benefit).

Intuit responded by adding 401K Advisor to Quicken.com; this tool also uses a Monte Carlo simulation, but with the option of conferring with a human financial advisor (by phone or online) for specific portfolio advice. For now the advice is free, although Intuit's partner, TeamVest, hopes to convert users to paying clients for automatic monitoring of their accounts. Quicken.com's 401K Advisor was only a few weeks old when I tried it, and it was definitely rough around the edges.

The Bottom Line Retirement planning has moved to the Web for good. Quicken.com's free advice is attractive, but Financial Engines' interface is more mature. This field is changing fast, so check them both out while you can still try them for free.

Taxes

Tax preparation is no one's favorite financial chore, but a computer at least makes it easier. While Quicken 2001 doesn't do taxes, it does integrate with TurboTax for Mac (formerly MacInTax). That integration, however, will be of limited use for finding deductions unless you've entered transactions in excruciating detail. On the other hand, if you use Quicken 2001's Portfolio feature to track your stock transactions, it will handily calculate your capital gains and losses and export them to TurboTax.

For tax year 2000, though, there's no reason to buy TurboTax for Mac ($30 to $40, depending on rebates) if you have a fast connection to the Web. Quicken TurboTax for the Web offers the same functionality for free (there's a $10 charge if you decide to print out your return or file it electronically).

Intuit will likely have some competition for the lucrative tax-software market, but probably not in time to make a difference this year. Rivals such as H&R Block ( www.hrblock.com ) will need to offer strong incentives if they are to lure Mac users away from tried-and-true TurboTax. As tax deadlines approach, more Web sites should become available. Our advice is to choose TurboTax for the Web in 2000, and then check later this year to see how some of the other sites shaped up.

The Bottom Line Tax tools are bound for the Web. You don't need Quicken 2001 or TurboTax to do your returns -- unless you do a lot of securities trading or want to keep close track of potentially deductible expenses.

The Last Word

Quicken 2001 isn't obsolete -- especially if you want finely tuned control over your finances and are willing to invest the time to keep your records current. On the other hand, tools for many essential personal-finance tasks -- such as retirement planning, bill paying, and tax preparation -- have moved to the Web, where new features and capabilities are emerging all the time. Perhaps someday soon Intuit will move all of Quicken's features to the Web. If Intuit doesn't, you can bet someone else will.

A former editor of MacUser and of Macworld Online, JAMES BRADBURY started using Quicken on a Mac SE back when Microsoft stock was considered a risky investment.

Online Banking Convenience: Financial portals can give you a consolidated view of your various bank accounts. Above, YahooFinance has grabbed information about a checking account and a credit card from Wells Fargo (some details are not shown here).Bills and More: Paytrust is a comprehensive bill-paying site that provides your online bank-account information through its SmartBalance feature. After all, it's good to make sure you have money in your account before you send off a payment.A Full Portfolio: Quicken.com includes a feature-rich portfolio-management site with customizable options.The Count of Monte Carlo: Financial Engines was the first consumer Web site to use a Monte Carlo simulation to generate probabilities for your retirement--providing a more realistic view of your risks and needs.April 15, Come She Will: Mac users will want to rely on TurboTax for the Web this year, but keep an eye on competing tax-tool sites for 2001.
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