G349

Drop your checkbooks. If you don't already use personal finance software, this might be the year to start.

Updated versions of the most popular programs, Microsoft's Money 2001 Deluxe and Intuit's Quicken 2001 Deluxe, are hitting shelves. And they've both ironed out annoyances that have turned off users in the past.

There's no more need to type in cryptic data from your 401(k) statements or charges on your credit card bills. This year, all these things can be downloaded into the software from participating financial institutions.

And both Money and Quicken have strong links with the Internet, allowing them to find and pull data from various online sources including their own Web sites.

As a result, Money and Quicken can grab things like stock quotes, news and mortgage rates from the Internet so you don't have to. Both software programs also will point you to tools on the Web that will help you solve problems the software finds with your finances.

Better yet, Money and Quicken have become more like electronic financial advisers and less just digital checkbook registers. They look for patterns in your spending, income or investments and offer "pop up" suggestions on how to improve your success.

They'll also warn if you're busting your budget and flag you if you are missing a way to cut your taxes, should refinance your mortgage or are close to being late paying a bill.

Don't worry about having all your data locked up on your PC. Both Money and Quicken let you access your financial data from any computer connected to the Web. If you choose, Money will put your data under password protection on Microsoft's Money Central site. Quicken uploads to Quicken.com.

Which one should you buy? Although Quicken has easily outsold Money for years, Money 2001 Deluxe is more polished and intelligent. It turns all your financial information into on-screen statements that tell you in plain English how your finances and investments stand. It's the better program for most people.

If you're already using Quicken, though, you may not want to switch. Quicken 2001 contains many of the same tools that Money 2001 has, it just takes more clicking to find them.

And Quicken is still the better product for people most interested in tracking their mutual funds and 401(k) accounts.

But do you really need to use personal finance software at all? And if you already use an older version of Money or Quicken, should you upgrade? As you decide, consider these financial problems and how Money 2001 or Quicken 2001 can help sort them out.

You know you could be saving more.

Grabbing that cup of gourmet coffee in the morning seems harmless enough. That is, until you realize it's costing you hundreds of dollars a year and you're essentially drinking your child's first year in college.

Money 2001 can help, with its proactive planning tools that make creating and sticking to a budget more realistic.

Like Quicken 2001, Money will scan your past spending in different categories such as rent and gasoline. It then crafts a budget that you can customize.

But here's the best part. Once you've crafted a budget, it stands over your shoulder whenever you make a financial move.

Let's say you drop $80 for a swank dinner. Once you enter or download the transaction, a new "feedback pane" in Money's electronic checkbook register will pop up with a thermometer. The display shows how much of the month's budget for cash withdrawals you've used up.

If you've blown your monthly restaurant budget, no worries. Money lets you shift overspending in one category to one you've underspent in, maybe groceries. You could also promise Money you'll spend $80 less on dining out next month than you've budgeted.

If day-to-day overspending threatens to kill your long-term savings plan, Money warns you right away.

Quicken 2001 also has budget and planning features, but there are so many steps and questions to answer, they can be frustrating.

You're having buyer's remorse over pricey stock purchases.

Now that things like earnings and revenue matter again on Wall Street, Quicken 2001's updated stock portfolio feature can help. The program downloads key data from the balance sheets and income statements of companies you're invested in.

The software fetches more than 50 "fundamental" data, including standard things such as earnings per share. But it also fetches the price-to-earnings-growth (PEG) ratio, a good way for investors to see how expensive a stock is relative to its growth.

And by just hovering your mouse pointer over an icon by the stock, you can see recent news pop up on the same screen.

Yes, you can get the data from the Web. But doing it through Quicken puts all the data in one place so you can sort your investments.

Best of all, Quicken downloads fundamental data for industry groups. So, for instance, if you own stock in Cisco Systems, you can compare its PEG ratio with the average ratios of companies it competes with, or even companies in other industries.

You can also sort your investments by industry group so you can see if you're too concentrated.

Money's portfolio also downloads fundamental stock data, including price-to-earnings ratios and earnings per share. It'll suffice for most users but doesn't include many of the data points Quicken can download.

Stocks are fun, but are your mutual funds actually better performers?

Take the guesswork out of your track record with Money's "Portfolio Review." At the click of a button, Money grades your investing results just as a mutual fund manager is scored: vs. major market indexes.

In a report written in understandable language, along with charts explaining the software's conclusions, you can see how you stack up. It'll tell you which stocks have performed the best or worst.

It'll also show you in a brutally honest chart how your mutual funds, including any 401(k) accounts, have done vs. your individual stocks.

You can use this report as a starting point to learn more. For instance, Portfolio Review will show what your worst-performing stock has been so far this year. You can click on the stock to analyze the company's financials, look at recent news and see how large your stake in that stock is as a percentage of your portfolio.

Quicken also has this feature, but it's not assembled as neatly as in Money.

You want to do more to track your 401(k).

Entering 401(k) information into personal finance software used to be painful, forcing you to type in data from paychecks. And even then, the software could only give you vague tracking information.

This year, Quicken changes that. Through a link that takes you to Quicken's Web site, you can type in the name of your employer.

After you do that, Quicken's 401(k) Advisor knows what mutual funds are available to you. It can then match your taste for risk and investment goals with the funds your employer makes available.

Unfortunately, Quicken's 401(k) Advisor makes you retype much of the data you've already entered into Quicken. And you don't need Quicken 2001 to use the 401(k) Advisor because it's a feature on Quicken.com.

Even so, Quicken 2001 users will appreciate how the software helps them find the 401(k) Advisor and reminds them to use it.

Money's 401(k) section doesn't do much more than help you enter data from your statement or figure out how to download it from the 401(k) plan manager. It doesn't go as far as Quicken in offering advice.

You worry your mutual fund holdings aren't diverse enough.

It's a legitimate concern. Many investors, especially those who hold several "balanced" funds, don't really know how their investments are spread. That's because these funds, although called balanced, may have large positions in a certain type of security.

For instance, a balanced fund you own may have large stakes in bonds. Thus, you may be invested more conservatively than you think or want.

Quicken 2001 can help. It downloads the "asset classes" of all your stocks, as does Money, and groups them by small, medium and large capitalization.

Quicken takes it a step further by also downloading the asset classes of all securities within the mutual funds you own. It converts that information into a pie graph showing how much of your mutual fund holdings are in large capitalization stocks, such as Microsoft, or midsize and small ones.

You can then take a short quiz that'll help you decide what types of asset classes you should be invested in. And by comparing your actual asset allocation with your desired one, Quicken advises you on the types of securities to buy or sell.

Money 2001 may disappoint many users most concerned with mutual funds. For instance, rather than separate balanced funds by asset class as Quicken does, Money 2001 simply puts them into an "other" category. That's not very helpful and may actually taint your understanding of your total portfolio.

You're afraid to miss paying a bill.

Quicken will scan your transactions and look for bills you pay on a routine basis.

If the software sees that you normally pay a credit card bill on the 15th of the month, and you haven't written a check as of the 13th, it'll warn you. It's done automatically, so you don't have to configure the software to do this.

Some users may prefer how Money finds patterns in bills. When you pay a bill, Money searches your records to see if it's one you pay routinely. It will then ask if you'd like to be reminded of this bill in the future.

You find personal finance software difficult to use.

That problem is reduced with Money 2001 Deluxe. It's designed so that all its insights into your finances are easy to understand.

Money's "Monthly Review" feature, improved slightly this year, is the best feature of any personal finance software. It analyzes your month's spending, income and investments and creates an easy-to-read report showing how you did vs. the previous month. It also tells you if you're on track for long-term goals and what to do if you're not, complete with Internet links to look for a better mortgage rate or find a stock to buy.