If an elderly person is facing challenges in handling financial matters, a daily money management program may offer a solution. It provides a personal assistant to help someone make budgets, pay bills, prepare checks, deliver bank deposits, handle tax returns, keep track of checkbooks and other financial records, and navigate any negotiations with creditors. The assistant also can help an elderly person identify potential financial abuse and understand charges on their medical bills, which are concerns that may be especially relevant to this age group.
On the other hand, these assistants do not have the training and expertise of a professional financial adviser or an attorney. They cannot give you investment advice or tax advice. Sometimes they can offer referrals to professionals in the appropriate areas.
Reasons to Use a Daily Money Management Program
As people get older, they may struggle to keep track of financial matters because of physical or mental limitations. Retaining a DMM service can allow them to stay outside a nursing home for longer and maintain their independence. By paying taxes, insurance, rent or mortgage payments, and other costs related to their home, they can avoid foreclosure, eviction, and related problems.
Also, family members may not be able to consistently help an elderly person with managing their finances. They may have their own families, as well as busy careers. Enlisting a DMM program can take this responsibility off their shoulders.
Financial abuse of elderly people is a widespread issue in the U.S., due to the vulnerability of senior citizens to scammers. Using a DMM program can provide an extra safeguard against the possibility of fraud. The assistant can monitor bank statements and credit card statements for any substantial, uncharacteristic withdrawals or expenses.
Types of Daily Money Management Programs
Some DMM programs offer their services for a fee, which may range from about $25 to about $100 per hour. (The amount of time needed per month often is only a few hours, but this will vary depending on the nuances of an elderly person’s finances.) An alternative may be retaining a DMM service through a non-profit organization or a government agency that is dedicated to helping elderly people. The Area Agency on Aging in your region can help you find these types of resources. They may provide services for free, although the services may be less substantial than those offered by for-profit programs.
An elderly person or their loved ones should exercise caution in choosing a DMM program, regardless of whether it is provided by a non-profit or a for-profit entity. The government generally does not regulate these programs, so it may be hard to determine whether they are trustworthy. Even after you have selected a DMM program, you should continue to monitor its activities. You also may want to take precautions such as limiting the funds in accounts to which the DMM program has access, informing banks that a DMM program will be helping you, keeping track of financial records related to accounts accessed by the DMM program, and continuing to sign your own checks.
Choosing a Daily Money Management Program
The first step in investigating your DMM options consists of getting referrals. You can consult trusted friends and colleagues, as well as non-profit organizations and government agencies that assist elderly people. Another option is consulting the American Association of Daily Money Managers. However, you should be aware that this organization does not guarantee that a certain DMM program is competent. It does have a certification program, which may provide a way to sort DMM programs by quality.
You should follow up with the DMM programs that are most appealing by interviewing them about their services, policies, and fees. For example, you should find out about their practices for training and supervising their employees, and you should find out whether they have insurance coverage. You may want to see whether a certain program is bonded, which means that you can collect money from a bonding company if you bring a claim against the DMM program. Asking for references from existing clients also may give you a sense of whether a program will provide you with effective services.