Computers:
Personal-Finance Programs Can Be Addictive
By Joan Indiana Rigdon12/19/1996
The Wall Street Journal
Page B1
(Copyright (c) 1996, Dow Jones & Company, Inc.)The digital age has produced yet another strange obsession, and Andrew
DeFaria has it bad.When the assistant administrator for a Hewlett-Packard Inc. compiler
laboratory first got Intuit Inc.'s Quicken personal-finance software in
1992, he mainly used it to balance his checkbooks. But now he
compulsively tracks his credit cards, stocks and IRAs, 42 active accounts
in all, and saves the receipts for everything he buys, including his
lunch-time roast-beef sandwiches. Each night he types the data from the
day into his computer and generates reports comparing his spending
month by month on everything from parking to hair treatments, including
the purple and blue streaks he recently added and then removed.The fact is that for the penny-pinching, the detail oriented or the just plain
neurotic, personal-finance software doesn't always make it easier to
balance the books. It can turn the chore into a consuming addiction.
Intuit, No. 1 in the market with 10 million users, and Microsoft Corp.,
No. 2 in the market with two million users of its Money product, estimate
that a 10th to a third of their users are hard core, using the program for
more than 20 minutes at a sitting.New technology has a history of creating new addicts, from compulsive
Tetris players to Web-surfing junkies, as people become hooked on
novel new ways of doing things. But psychologists say that in addition,
personal-finance programs offer people a way to quickly quantify their
personal priorities. "People see themselves reflected in how they spend
their money," says Barbara Mackoff, a psychologist who consults for
corporate clients. For others, says Ms. Mackoff, the software provides a
sense of control, of "being in the driver's seat."That is what motivates Vincent Llewellyn. A doorman at the Marriott
Hotel in Washington, D.C., Mr. Llewellyn says his finances used to be
out of control, particularly because his income is mostly tips; he says he
never knew how much he had in his checking account or on credit cards.
Now, he whips out his Newton -- a hand-held Apple Computer Inc.
machine that runs a portable version of Quicken -- eight or nine times a
day to track everything from taxi fares to the 89 cents he spends for each
of his three daily cups of coffee. Every Saturday, he loads the data into
his home computer, ordering up detailed bar graphs that vividly display
where his money goes.When the pie charts showed too much money going to taxi fares and
cellular phone calls, Mr. Llewellyn says, he changed his spending habits.
"I can be a little nerdy about it, but I have to stay on a budget. I'm not
rich," he notes.Leigh Anne Varney, a San Francisco public-relations executive, says she
had to quit Quicken cold turkey last year because she was spending two
hours using the software every weekday morning. That meant she didn't
start working in her home office until 10 a.m. and had to skip lunch to
catch up.Ms. Varney succumbed to the software during work, too. Waiting for
someone to pick up the phone after she placed a call, "I'd click into
Quicken and fiddle with something," she says. "And whoever it was
would come on the phone and I'd be staring at the computer and looking
at my loan planner or my college planner and I'd completely forgot why I
called that person." Sometimes, she confesses, she'd have to hang up.Much of what Ms. Varney spent her time on was a fantasy element of the
software, which allows the debt-laden to envision zero credit-card
balances and those living modestly to aspire to millions. The so-called
planners, which are included in most brands of personal-finance software,
allow users to type in fictitious amounts of money and interest rates to
calculate how fast savings will grow and what they will be worth at
retirement.For people like Kelda Brown of Rockville, Md., the features permit
hours of dreaming about building fortunes. "I think if I have this much
money and I get a 12% interest rate, how long will it take me to become
a millionaire?" Ms. Brown says. Too long, she discovered, so she started
trying to figure out how much she would have to save to assure that she
and her husband would have an annual income of $70,000 at retirement
some 30 years hence.But the program's inflation calculator informed her that $70,000 a year in
today's dollars will be equivalent to about $350,000 by the time she
retires. And in order to have that much, she and her husband will need to
have saved $4.5 million by the time they retire. "Isn't that horrible?" Ms.
Brown asks. "This is what the financial planner will do to you. It will kill
you."Indeed, Mr. DeFaria's net-worth graph was so discouraging that he
began hunting around for other things besides cash to add to it. After all,
the software encourages this. When counting assets, it prompts users to
include household assets and lists several dubious examples, including
roller skates and toasters.After inserting obvious things like his van, which he has since sold, Mr.
DeFaria added the value of various pieces of furniture and the hair dryer
in his bathroom. Finally he turned to his closet, where he estimates he has
$1,500 of clothing, including three pairs of scuffed-up sneakers and a pair
of dress shoes, which he valued at a total of $50.Does he really think he can sell them for that much? "Realistically, no," he
says.He overvalued his wedding ring, too. Mr. DeFaria says he paid $800,
had hoped to get $400 when he sold it after his divorce, but ultimately got
only $90 cash from a jeweler. "That's what you call depreciation," he
says.Mr. DeFaria's Quicken obsession compelled him to set up an unofficial
site on the Internet's World Wide Web, where he tossed barbs at Intuit
for product flaws and answered fellow users' technical-support questions
via e-mail. He quit that this year but says Quicken got him through the
roughest parts of his marital breakup. "It was cheap entertainment," Mr.
DeFaria says.
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