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Finding a daily money manager

If it pains you to sit down to write out your monthly bills, a daily money manager, or DMM, might be the medicine you need.

Daily money management involves taking care of financial duties such as paying your bills, depositing your checks and balancing your checkbook.

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"It's a personal service, but it's one that people haven't really thought about before," says Carla Morelli, president of Freyer Money Management in Gaithersburg, Md. "Everybody has to pay bills. But now people are starting to think 'Well, why don't I hire someone to do it?'"

DMMs can be very useful for a variety of client lifestyles such as: the elderly, who have become unable to keep careful track of their affairs; children of seniors who don't have the time or energy to invest in their parents' finances; the busy executive or small businessman who just doesn't have time; and the frequent traveler who is away from home for lengthy periods of time, either for work or pleasure.

If you decide a DMM is the thing for you, here are some important things to keep in mind as you conduct your search:

What they do and don't do
Unlike accountants and investment professionals, daily money managers do not guide you through financial planning strategies. Rather, they carry out the mundane financial tasks that make up day-to-day life so you no longer have to. Usually, a DMM will work with you to set up a checking account from which bills will be paid. Then you determine how that checking account will be funded -- via a Social Security check, a monthly electronic transfer from another account, or some other means. After that, bills will no longer be sent to you. Instead, they will be sent to your daily money manager who will make sure they are paid on time.

In addition to paying bills, daily money managers perform other functions. Organization is key when it comes to managing financial documents, and a daily money manager can set up a financial organization system for you. When tax time comes around, your daily money manager won't do your taxes, but he can get all of the paperwork together, and once your accountant figures your taxes out, your daily money manager can make sure the return is sent off in time.

Another task you can leave to your daily money manager is that of negotiating with creditors. So if you want to change your payment due date or if there are mistakes on your billing statement, your money manager will pick up the phone and speak with the creditors on your behalf.

Spell it all out
When you first sit down with a daily money manager, it's a good idea to have a contract written up that denotes what happens if bills are not paid on time, says Pat Manalio, former president of the American Association of Daily Money Managers.

"The contract will also have to cover the daily money manager, for instance, if the client fails to get the bills to the daily money manager [in time]," says Manalio. "So there are issues on both sides that both people need to be covered for their own interests."

In the loop or out
When it comes to staying involved in the process, you can be as involved in it as you want, says Morelli. The daily money manager can send you a monthly report detailing all of the transactions that took place, or you can request that you be alerted before money is paid off on certain debts such as credit card bills.

Naturally, this service is not free. According to the AADMM, you can expect to pay between $35 and $100 per hour, depending upon your geographic area. However, there could be other costs involved since daily money managers will charge you for outside fees incurred, such as the purchase of stamps for paying bills or the cost of long-distance calls for calling creditors or other bill collectors.

How do you find a daily money manager? Follow this advice:

  • One of the best places to start your search is with the Web site of the American Association of Daily Money Managers, where you can find a list of money managers by state of residence.
  • Before meeting face-to-face with someone, ask if they charge for the first session. Some money managers offer a free consultation, which lets you make a more informed choice about whether daily money management is for you.
  • Ask for references from people who have used their services before, and check those references out. After all, you're entrusting your financial health to that individual. Make sure that trust is warranted.
  • Make certain the DMM you're considering is insured and is willing to work with another individual such as a lawyer or an accountant on your behalf.
  • Get a referral from someone in the financial services field, such as your tax adviser or accountant.
  • Go with your gut -- it may be the most important thing to do," says Manalio. "Make sure you like and instinctively trust this individual. If it doesn't feel right, it isn't. It's got to be a good fit. The chemistry has just got to be there," she says.
  • See also: Daily money managers for the average Jill or Joe

-- Posted: May 25, 2005





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