My Personal Financial Odyssey – Quicken – Part 2

To show you just how much I ‘love’ Quicken, you should know that about 6 years ago I was so fed up with it that I went out and bought ‘Microsoft Money,’ and started using it.  That turned out to be an unmitigated disaster, so I was back to using Quicken within a month.  I have looked for a program to replace it but have never found one that can do all of the things Quicken can.  It truly is a remarkable program that has helped millions of people since it hit the market in the mid-1980’s.

I first started using Quicken in the late 80’s, and it has been the foundation of my personal finances and a major asset to my professional career ever since.  Its major selling point is how it simulates listing ‘checks into a checkbook’ for virtually any kind of financial transaction.  The program takes all of the debit and credit stuff of real accounting and puts it in the background so you can get a Balance Sheet/Net Worth Statement and an Income Statement/Profit & Loss Statement without having to KNOW accounting.  And Quicken is the one inexpensive program I have found that does a reasonably good job of tracking investments such as stocks and bonds.

All of this is terrific stuff and was a major boon to those of us who wanted to keep track of our finances.  To give you an understanding of just how wonderful this program was and still is, you should know that my father (who was also an accountant) used to keep track of our family finances on many large green bar columnar sheets that he would pore over for hours with his adding machine cranking continuously.  Quicken eliminated all of that.

Unfortunately, as wonderful as Quicken is, there are several aggravating things about it as well.  In order from most important to least important, here are some of those aggravations:

  • Too many options leads to too much information – Quicken gives you so many options in terms of accounts, categories and reports that you can easily end up with a mess if aren’t disciplined in your use of it.  (Not a problem for me)
  • Transfers between balance sheet accounts and balance sheet categories masquerading as income statement categories both can lead to reports that really DON’T give you an appropriate income statement.  (Not a problem for me)
  • There is no good budgeting facility in the program.  (Not a problem for me)
  • Situations do come up where the report or information you are getting out of Quicken is just flat-out wrong and you know it.  This usually occurs in the investment-tracking part of it, and often requires a work around.
  • ‘Required’ upgrades.  I say it in scare quotes because you are NOT literally required to buy a new version each year, but Quicken will shut down your ability to download information from your accounts via the internet if your version gets to be too old.
  • Quicken brings out a new version of its software each year, but not each new version is an improvement.  In my experience only 1 in 3 actually does improve the software and some of these new versions have been a real pain to learn and use.
  • Though it has gotten better, the technical support for Quicken has typically been close to non-existent.

So you can see now why I was so frustrated with Quicken that I tried a competitor.  It is a wonderful program that I would be hard pressed to live without, but it has often made my life miserable, though not because of the first three bullet points above.  The reason the first two are not a problem for me is because I AM an experienced accountant who does know the underlying debit and credit stuff and what a proper set of financial reports should be giving you.  The third point is not a problem for me because I built my own budget capability, the Cash Flow Analyzer , which I have discussed previously.

Quicken can be the foundation of your financial program if you are disciplined in how you set-up your accounts, categories and reports, have a modicum of understanding of accounting and develop some kind of budget to compare it to.  But if you don’t have those talents or the time to employ them, then I recommend having an experienced accountant help you set it up and periodically review it in order to make sure you are getting all that you can from the program.

Next time I will go through the many ways I use Quicken to help me stay on top of my finances.  Following is a list of those ways:

    • Meaningful categories to assist in budgeting
    • Recurring transactions
    • Projecting 2 months ahead
    • Reconciliation
    • Proper financial and tax reporting
    • Investment tracking
    • Diversification

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