Before You Set Up a Budget with Microsoft Money

To create a budget and use budget reporting in Microsoft Money you need to carefully categorize your transactions. If you use a "hit or miss" method of categorizing transactions in Microsoft Money, your budget reports will be inaccurate and meaningless. Assigning categories to transactions in Microsoft Money is easy and Money comes with a good set of default categories to get you started.

Although you can set budgeted amounts in Microsoft Money for the categories you will use right away, to get accurate budget reporting you need to use Microsoft Money for at least three months. If you wait to set up your budget until you have used Microsoft Money for three months or more, you will save time by using the data entered during that time for budget projections.

You have two options when setting up a budget in Microsoft Money:

• The Essential Budget, which allows you to set up your budget faster but with less detail.

• The Advanced Budget with will take more time but lets you add more definition to your personal budget.