Daily Money Managers Value

Written by Ifaat Bosse, Bottom Line Financial

They guard against financial exploitation. They keep clients current and prevent overspending. They educate, they question, and they do not accept answers blindly. Welcome to the world of daily money managers (DMMs).

Before getting married, I worked full time, lived on my own in the city of Chicago, and saved for retirement. I was completely financially independent. When my husband and I got married and had children, we decided to move to the northern suburbs. We decided that I would stop working and stay at home with the children and my husband would work. This arrangement worked for a while until I needed to write a check for my son. I called my husband at work and asked, “where is the checkbook?” His response was that the checkbook was with the rest of the financial documents. At that point I realized how vulnerable I had become. From being completely financially independent to not knowing where the checkbook was. That weekend we embarked on a financial “cross training.” I learned where the checkbook was, where all the financial documents were and where the passwords were.

I tell my friends and family to do this cross training so that the spouse who does not handle the finances knows where critical financial documents reside. If the financial spouse suddenly becomes incapacitated, the other spouse is then armed. The cross training must start at home. When that cross training does not occur, daily money managers often step in. Daily money managers assist by helping people complete their daily financial and administrative obligations.

Clients include senior citizens, people with disabilities, busy professionals, high net worth individuals, divorcees, widow/widowers and frequent travelers. These clients are either unable or unwilling to manage their financial affairs. A typical client may be someone who was hospitalized then entered rehab. When they return home after what could be several weeks, they are facing a new reality and they often require a myriad of services in the home including daily money management. The paperwork has accumulated, and bills need to be paid. In an ideal situation, healthy people often don’t want to address paperwork. When people are ill, it becomes increasingly more challenging and the risk of incurring penalties and interest charges increases. A daily money manager can come in for several sessions to get bills paid and file important documents. They can arrange to set up bills on auto pay so if clients reenter the hospital or travel, they don’t have to worry about the bills getting paid. The relationship can be short term until the client gets back on their feet. Other times, daily money managers come in more routinely and assist clients on a monthly or semimonthly basis.

In addition to bill payment, other services daily money managers provide include budgeting so that clients understand how much they can spend in a given time period, tax document organization so that clients file their taxes on time, bank reconciliations so that clients know how much money is in their accounts and finally, calling vendors and negotiating with creditors,. With client permission, daily money managers also establish working relationships with the other professionals in their client’s lives. This partnership assures a more synergistic approach to managing the client’s affairs. Some daily money managers provide small business accounting services as well.

It’s important to note that daily money managers have various backgrounds. In choosing a daily money manager, there are several key questions to ask including:

1) Does the candidate have Errors & Omissions insurance?
2) Can the candidate act as a Power of Attorney? If so, does he or she have additional fiduciary coverage?
3) Does candidate have any professional certifications?
4) Can the candidate provide references?
5) What does the candidate charge? Most daily money managers charge for travel and out of pocket expenses.
6) Has the daily money manager passed a background check? The American Association of Daily Money Managers now requires all members to pass background checks.
7) What prior work experience does the daily money manager have and for how long has he or she worked in the field?

The national membership organization that governs the profession of daily money managers is called American Association of Daily Money Managers or AADMM. Individuals looking for a daily money manager can find one by visiting the AADMM website (aadmm.com) and entering their zip code in the “Find a DMM” section.

When a daily money manager is employed, clients can enjoy their leisure time and have the peace of mind knowing that their affairs are in order.