Personal Finance Made Simple
Kathy Yakal, Feature Writer
No matter how much money you earn, it never seems enough. Stretching your income to pay for everything you need, and still putting a little away for retirement, often require the services of an accountant. But thanks to recent personal finance software for your computer, the accountant's fee may be one expense you can forego.
Andrew Tobias, best-selling author and financial guru, watched through a one-way mirror as people tried using his new home finance software. Unlike most such programs, Tobias's package has personality: It incorporates his dry wit as well as his financial talents. The program is comprehensive, easy-to-use, and entertaining. As Tobias anonymously observed the final consumer testing, everything seemed to be going well and the responses were favorable.
Then one of the test customers raised an objection. After using the program for a while, he announced he would never buy it. "It's got a sense of humor," he said. "Money is a very serious matter."
No pain, no gain. If it tastes bad, it must be good for you. Keeping track of personal finances is something that many of us have always assumed must be painful. But now a home computer can help ease that burden. Personal budget programs, ranging from simple checkbook-balancers to complete financial packages, are simplifying money matters for thousands of people.
Who needs it? "Anyone who is motivated and forward-looking, because people who have no interest in the future and aren't motivated don't buy computers," says Tobias.
"Anyone who fits that profile by definition has the intelligence, motivation, and financial needs. They may not have a lot of money, but they have earning power and they have a future they're trying to plan for, and they certainly have to pay bills and pay taxes. Anyone like that is a suitable applicant."
Tobias, author of the best-selling book The Only Investment Guide You'll Ever Need, recently teamed up with the Micro Education Corporation of America (MECA) to produce a sophisticated home finance program, Managing Your Money (available for the IBM PC/PCjr and Apple IIe/IIc; $199.95). It's quickly gained a reputation as one of the best such packages on the market.
Though he was familiar with personal computers, having bought an Apple III a few years back, Tobias was doubtful whether a home computer could handle a comprehensive financial package. "I kept saying, ‘Can it do all that?’ And they kept telling me, ‘Forget what it can do. Just tell us what you want it to do.’"
He found out the computer could do everything he wanted. "My idea was to have a place in the program for everything that a family would have—short of the Rockefellers and Mellons—anywhere from middle class to upper-middle class. What does a family like that have? Checking and savings accounts, budgeting and charge accounts, stocks and bonds, insurance, taxes, investment and loan analysis, and retirement planning. I threw in a reminder pad and net worth analysis. Basically, I just looked at my book and said, ‘What's in here that I just talked about in terms of advice?’"
The program turned out, he thinks, better than a book. "Far from just telling someone, ‘Gee, you should make a budget,’ we actually give them something that will help them make a budget and keep up-to-date. This thing is a utility. It actually does things. [It's] the difference between a cookbook that gives you recipes and a kitchen that has seven or eight appliances and each of them does things. This will keep records, generate reports, calculate things, put into action what you would have had to do with a pencil and paper after reading a book."
And it does all of those things with virtually no documentation. The manual accompanying the program basically tells you how to get the program running; once you've accomplished that, everything you need to know is explained by the software itself.
Managing Your Money is but one of dozens of new home finance programs. Varying in sophistication from simple budget-balancers to full-blown financial forecasters, they may be one of the most practical software investments you can make, claim their publishers.
"One of the things people want to do early on is button down their finances," says Ken Currier, vice president of Softsync. "I think they feel that's a good primary use for their computer, something they can get tangible results with."
Softsync started out developing software for the Timex/Sinclair. A few years back, the company published a very simple checkbook-balancing program and was amazed when it sold 80,000 copies. Then, recalls Currier, they realized that people might be interested in using computers for fairly serious financial purposes. But the challenge was to strike a good balance between true usefulness and the work involved in maintaining a budget on a computer. "Checkbook programs aren't really that useful," admits Currier. "That tends to be a lot easier with pencil and paper. On the other extreme, nobody I know really needs accounts payable and accounts receivable and other business stuff like that."
So they sat down with a bank manager who also happened to be a computer programmer and talked about what kind of features would be helpful to the typical home computer owner. The result was The Personal Accountant (available for the Commodore 64 on cassette and disk for $29.95 and $34.95; and for the IBM PC/PCjr and Apple IIe/IIc for $49.95). The Personal Accountant keeps track of income and expenses with a double-entry bookkeeping system. "The process is really quite simple," says Currier. "You don't have to know anything about accounting. All you have to know is that money comes from one place and goes to another."
In addition, The Personal Accountant can provide professional financial reports listing assets and liabilities, income over expense, and trial balances, reports that can help prepare tax returns. An amortization section and integrated data base manager complete the package.
Another program, Personal Money Matters, by Avante-Garde Publishing Corporation, is designed to both simplify bookkeeping and facilitate long-range forecasting. (It's available for the Apple II series, $79.95; IBM PC, $99.95; and soon for the Commodore 64.) Each segment of the program comes on a separate disk. Budget Master balances bank and credit accounts, sets spending priorities, and monitors expenditures. The Organizer keeps an inventory of all valuables, household goods and properties, as well as important dates, payments, and special transactions. And Investment And Loan Calculations lets you explore various investment opportunities and compare options.
Tom Measday, vice president of marketing and sales for Avante-Garde, says Personal Money Matters is aimed at people relatively new to computers, generally upper-middle class families. "The kind that keep decent financial records on paper," he explains. "The computer helps them do something they already know how to do."
A personal finance program may be one of the most difficult types of software to design—people have a tremendous variety of financial needs and ways of taking care of them. "It's hard to make the software flexible enough that people can suit it to their needs," says Tobias. "If it's too rigid, you'll hit only a certain amount of people who want to do it your way. You have not only the complication of the computer, which is daunting, but most people find personal finance daunting."
Yet, Tobias doesn't advocate a separate program for each purpose. "Any program that just does one thing, especially if it's just a checkbook program, is a toy. You don't need a computer to balance your checkbook. The bank has a very big computer that does a good job itself of balancing things."
(Besides, Tobias confides, you don't really need to balance your checkbook. "I never balanced a checkbook in my life. I just look to make sure all the checks are mine—I once got 15 checks from a Chinese laundry—and that no one has forged my signature. And I take a very quick look down to see that all my deposits have been credited. You know in a vague sort of way what the balance is supposed to be.")
Because people's financial needs and options constantly change, most publishers of financial software frequently revise their packages. "Actually, any good software product should be updated every 12 to 18 months," says Avante-Garde's Measday. "You not only need to ask people up-front what they want by doing extensive beta-testing [testing software with consumers], but you need to keep checking along the way."
Software publisher Futurehouse tackles that problem by mailing bimonthly news-letters to its customers and maintaining a technical support hotline. Futurehouse recently released the third version of its popular Commodore program, The Complete Personal Accountant.
To ease the transition from shoebox accounting to home computer accounting, the latest version of CPA incorporates lots of graphics, windows, and icons. It even uses screen graphics to make checks, deposit slips, and credit card receipts look like their paper counterparts.
"What's wrong with making a check look like a check?" asks Andrew Hock, vice president of Futurehouse.
"I think you're going to see a lot more financial packages using things like icons and windows in the future," adds Hock. "They're a lot more user-friendly, and they require less documentation. After all, that was the whole idea behind the Macintosh."
Home finance software won't make you rich, and it won't automatically run your household, either. You'll still need to spend some time filling in the blanks on the screen. That's the chief drawback of most checkbook-balancing programs. It's far more work to enter all the data into the computer than it is to keep your checks on file and balance your books with a pocket calculator.
For a personal finance program to be practical, the benefits must outweigh the labor required. Entering information "has to be very fast. Otherwise, why bother?" says Softsync's Currier. "At the end of the month, you should be able to sit down with all your receipts and within 20 to 30 minutes have everything in, maybe run a couple of reports and see where you are each month."
"It's worth it," says Andrew Tobias, "even if someone only uses it five or six times a year, maybe for tax hypotheses and rental property analysis. For those people, it would basically be the ultimate pocket calculator. But for most people, I would hope they'd use it once a week. You can get the same work done as before, but it will be under control, instead of having the whole thing pile up in a shoebox."
There are dozens of personal finance programs, and space doesn't permit us to list all of them. But here's a selection of what's available for various brands of computers.
The Home Accountant
Arrays, Inc./Continental Software
11223 S. Hindry Avenue
Los Angeles, CA 90045
IBM PC $150.00; PCjr $74.95; Apple II series, TRS-80, Atari, and Commodore 64 $74.95.
Personal Money Matters
Avante-Garde Publishing Corporation
P.O. Box 30160
Eugene, OR 97403
Apple II series $79.95; IBM PC $99.95; soon available for Commodore 64.
Dow Jones Home Budget
Decision Support Software, Inc. and Dow Jones & Co., Inc.
Dow Jones & Co., Inc.
P.O. Box 300
Princeton, NJ 08540
IBM PC $139.00
Financial Cookbook
Electronic Arts
2755 Campus Drive
San Mateo, CA 94403
IBM PC/PCjr, Apple II series, Commodore 64, and Atari $50.00
Complete Personal Accountant
Futurehouse
P.O. Box 3470
Chapel Hill, NC 27514
Commodore 64 $79.95; $20.00 additional for technical support.
Managing Your Money
Micro Education Corporation of America
285 Riverside Avenue
Westport, CT 06880
Apple IIe/IIc, IBM PC/PCjr $199.95.
MicroCheck
Microbits Peripheral Products
225 3rd Avenue S.W.
Albany, OR 97321
Atari and Commodore 64 $49.95.
Dollars and Sense
Monogram
8295 La Cienega Boulevard
Inglewood, CA 90301
IBM PC/PCjr $179.95; Apple Macintosh $149.95; Apple IIc $119.95; Apple II/II + /IIe $100.00
Your Personal Net Worth
Scarborough Systems, Inc.
25 N. Broadway
Tarrytown, NY 10591
IBM PC/PCjr $99.95; Apple II series, Commodore 64, and Atari $79.95.
The Personal Accountant
Softsync, Inc.
14 E. 34th Street
New York, NY 10016
IBM PC/PCjr, Apple IIe/IIc $49.95; Commodore 64 disk $34.95 and cassette $29.95.
64-Accounting System
Software Design, Inc.
P.O. Box 570
Waterloo, IA 50704
Commodore 64 $69.95.
Money Manager
Timeworks
P.O. Box 321
Deerfield, IL 60015
Commodore 64 $24.95; IBM PC/PCjr $59.95; Apple II series $39.95.