Handling bills, deposits, and payments is a daunting task for most of us, but consider how much more challenging it becomes as we enter our later years. The elderly are more susceptible to diseases such as dementia and Alzheimer’s, which can radically impair their ability to manage their personal finances.
Imagine an older person, perhaps a widow, living far away from her children. Alone and vulnerable, she can easily become victim to unscrupulous con artists who are bent on taking advantage of her financially. If this was your mother or grandmother, what could you do to ensure her security? The answer is to hire a professional daily money manager.
What Is a Daily Money Manager?
The profession of daily money manager (DMM) has been in existence for about 15 years according to The American Association of Daily Money Managers (ADMM). DMMs help their clients to deal with personal financial matters such as:
- Collecting and sorting through mail
- Paying bills
- Organizing financial records
- Organizing records for income tax preparation
- Negotiating with companies regarding bills and bill payments
While many DMMs come from the financial industry, many having been CPAs or financial advisors, they may not necessarily provide advisory or tax preparation as part of their services. For many, working as a DMM is their second or third career.
Who Needs a Daily Money Manager?
Seniors can benefit greatly from the services of a DMM. As a former tax preparer, I saw for myself how many of my older clients found the tasks of managing bills and paperwork more challenging with the passing years. I only saw them once a year at tax time, and sometimes the change in their health from the year before was shocking.
I served the population of a small town in Arizona with a large community of retired persons. They had moved there for the beautiful scenery, low taxes, and warm weather. Far from their extended families and children, when health issues made addressing financial matters impossible, they had to rely on friends and neighbors for help.
Sometimes I would work with a neighbor to comb through a client’s home office looking for the papers needed to do the tax return. If my client had access to a daily money manager, this and other vital functions could have been accomplished seamlessly.
Others who can benefit from the services of a DMM include:
- People who are constantly on the road for work or pleasure
- Those who prefer to pay someone to handle their paperwork
- Busy professionals who have more money than time
- Persons with disabilities that prevent them from being able to handle their financial matters themselves
Why Hire a DMM?
Why not just have a CPA or attorney perform money management tasks for you or your aged relative? Well, the cost is likely to be much lower per hour, ranging from $60 to $90 per hour on average depending on services and geographic area. In contrast, CPA and attorney fees usually start at more than $100 per hour. Moreover, it’s better to have the CPA or attorney provide insight periodically, rather than paying them high rates to do basic bill paying and other daily financial tasks.
A DMM is one of the professionals that you should employ to help you manage your personal finances along with:
- A CPA or Enrolled Agent (EA) for tax preparation and financial advice
- A Certified Financial Planner (CFP) to help you manage your investments
- An attorney to help you with your will, estate, or trust
The separation of duties between the DMM, CPA, financial advisor, and attorney not only saves money, but prevents any possible conflict of interest that might arise when the person handling your cash is also the one who does advising, tracking, and reporting. What’s more, the oversight provided by each professional helps to ensure that there is no occasion for commission of fraud or theft.
How to Choose a DMM
Your choice of DMM is critical because of the sensitive nature of the information that they will handle for you. The profession is not regulated, so you’re left on your own to find someone who is both competent and honest. Here’s how you can begin your search:
- Ask friends, neighbors, healthcare professionals, and financial professionals for referrals. They may have personal experience from which they can draw to give you a lead on a reliable DMM.
- Ask other professionals who may have experience with DMMs such as clergy, geriatric care managers, social workers, and attorneys.
- Check with the American Association of Daily Money Managers (ADMM): The organization provides training and certification as well as referrals. Certification is not required in order to be a DMM. To become certified requires 1,500 hours of DMM experience and passing an exam administered by the ADMM.
- Refer to the American Association of Retired Persons (AARP) website. Low-income seniors may qualify for assistance through the AARP Money Management Program, which operates in 21 states and the District of Columbia. The site also provides referrals to DMM agencies in 12 states. Trained volunteers provide services in paying bills and management of government benefits, such as Social Security.
- Refer to the Eldercare Locator site to find nonprofit and government programs in your area that can refer you to DMM programs.
What to Look for in a DMM
Once you’ve located a few good prospects, be sure to interview them to find out if they conduct their business in a way that works for you. Be sure to ask:
- What security measures do they have in place to protect your data?
- Do they bill by the hour or a flat rate per month?
- What tasks will they perform and bill for? For example, do they charge for the time to drive to your home or office?
- Are they willing to work with your CPA, EA, and attorney?
- Do they have errors and omissions insurance and are they bonded?
- Can they provide a list of references?
Though they’ve been around for years, DMMs haven’t gotten a lot of attention despite the fact that they provide an important service. As our population ages, there’s no doubt the profession will gain in exposure, importance, and regulation. But especially now, as DMMs are not required to be certified, doing your own due diligence is imperative to picking a quality DMM for yourself or a loved one.
Have you or anyone you know benefited from the services of a DMM?