For years, the computer has been as basic a tool for financial professionals as a telephone.
But in the past couple of years, a growing number of individuals have begun to look to their personal computers in the same way: valuable tools that can help them track their finances, manage their investments, pay their bills and even buy or sell their stocks and bonds.
About 36 percent of home computer owners use some kind of personal finance software, according to a January survey conducted for Intuit, the Menlo Park, Calif., developer of the popular Quicken financial program. Some 14 percent of the 350 users surveyed in major U.S. urban areas said they used tax preparation software, said Quicken product Manager Suzanne Taylor.
Ms. Taylor estimates that the number of personal finance programs being sold in the United States is increasing by 25 percent to 30 percent a year.
But prices are also dropping: For the first nine months of 1991, publishers' wholesale income for personal finance programs has risen 0.2 percent over 1990, according to the Software Publishers Association.
The most basic kind of personal finance software is simple: It automates checking accounts and bill paying, in theory cutting down on monthly paperwork and reducing mistakes.
The most popular of these packages is Quicken, which carries a retail price of $70 but can be bought for far less (the Windows version is on sale at some Egghead stores for $15.) Available for DOS, Windows and Macintosh systems, it does single-entry bookkeeping and can generate a variety of reports on cash flow and budgeting, and can feed data directly into a number of popular programs that prepare your tax returns.
Quicken's success recently inspired Microsoft Corp. to introduce its own personal finance program, called Money. And MECA Software Inc. of Fairfield, Conn., publishes a more complex personal finance program called Managing Your Money, which will soon appear in its eighth edition.
Few individuals need to turn to a computer as a simple replacement for a check register, pencil and $10 calculator. "Your computer's over-qualified for the work," said Fred Shipley, associate professor of finance at DePaul University and editor of an AAII guide to computer investing.
So Intuit and MECA have turned their attention to adding financial planning to their programs. A popular addition: portfo
lio management for stocks, bonds and the like. Managing Your Money's new edition will include an asset allocation feature that will aid investors who practice modern portfolio management theory.
Regardless of how actively you invest, one thing everyone has to do is file a tax return, and there's no shortage of programs to help. Some, like MacInTax for the Macintosh, show you exact replicas of the IRS forms on your computer screen. You enter numbers for income, deductions and the like, and the program plugs them into the right spots, does all the math, and
tells you how much you owe, or can expect as a refund.
Other programs don't show you replica forms, but do try to act as a sort of surrogate accountant, quizzing you on your financial situation to help determine whether you should file a joint return, or if you need to pay the Alternative Minimum Tax.
Individuals can't electronically file their returns directly to the IRS -- yet -- but a module in many tax preparation programs lets users file electronically to a service bureau that then files with the IRS. The process promises to speed refunds, although the fees, typically $30 or $40, might turn out to be steep for perhaps getting your refund a few weeks early. Some of the service bureaus offer refund anticipation loans, but the cost again often works out to an exorbitant annual interest rate.
For more determined investors, there are hundreds of programs geared toward finding good investments and profiting from them, planning financial goals and monitoring the stock market.
Indeed, without a computer, many investors couldn't go it alone without being run over by professionals with heavy-duty computing at their disposal. And while individuals probably won't get into the kind of potentially volatile programmed trading that stock exchanges have recently curbed, they can buy products to help them time the market or analyze a company's financial performance and stability in the market.
For users searching for the perfect technical analysis program, or just interested in a primer on using the computer for finance, AAII publishes the Individual Investor's Guide to Computerized Investing. When the guide was first published nine years ago, it was 24 pages long. The ninth edition, just released to bookstores for $24.95, runs 502 pages and lists about 450 personal finance programs and 100 investment data base services.
Some of the programs in the guide are from large and established publishers; others are penned by one-programmer operations who might not be as stable.
"There's a lot of turnover; an average of 20 percent of the companies are there one year and not the next," said Mr. Shipley, who edits the guide.
The advantage to some of the lesser-known programs is price, according to Mr. Shipley. Indeed, many of them are shareware products, distributed freely on bulletin boards and through user groups with the understanding that people who use the programs regularly will mail a nominal registration fee to the author. While more established publishers ask as much as $3,000 for certain specialized futures trading programs, some shareware packages listed in the guide cost $20.
The 40-year-old NAIC also publishes its own software, SSGPlus, that members and non-members can buy. Its function is to computerize the paper stock selection guide used by many investors, said Bruce Wagner, director of computer operations for the Royal Oak, Mich., group.