Finding A Third-Party To Manage Household Finances

As you know, I offer services as a Daily Money Manager (DMM) and support my clients by helping them with their household financial tasks. If you should find you or someone you know needing someone like myself, how do you go about finding someone who can do this?

That’s the question that I help answer when I present the topic to different social groups. I thought it would be useful to publish this in order to learn more about this lesser-known occupation.

Why Would A Daily Money Manager Be Needed?

Photo of person counting money by Karolina Grabowska on PexelsIt is easy to see how a daily money manager would be useful to someone who lives alone, does not have any relatives or friends who could help them with their household finances and who cannot perform this task themselves any more. But don’t most people have a sibling or offspring who could do this? There may be relatives who might assist, but there are a number of situations where this might not be ideal. Having an independent third-party engaged may actually be the better situation for all concerned. Here are some situations that commonly come up:

  • A sibling or child might be able to help, but they are so busy themselves with their own lives they just cannot allocate the time needed to help out.
  • A sibling or child might be willing to help, but they may not be very good with money and thus could make things worse for the parent.
  • A sibling or child might want to help as a means to access to parent’s money to use themselves, particularly if the child is not doing well financially and there is a temptation to help themselves to this additional source of funds.
  • Although I encourage older adults to have a conversation with the beneficiaries of their estate plan, not all parents want to let others in on their financial situation. They would rather work with a professional than a relative.
  • Managing money for a relative changes the dynamic of the relationship, and a professional can help to maintain good family relationships.

Where To Start To Find A Daily Money Manager

There are a couple of ways to identify someone providing daily money management services. First, ask family and friends if they know of anyone who provides these services. Aunt Mary’s cousin Jack might have used someone in his later years and his family could tell you who that was.

Check with a trusted attorney or financial professional to see if they can recommend anyone. The American Association of Daily Money Managers also provides a method of finding a daily money manager as well.

I’ve Found Someone – Are They Any Good?

After identifying one or more people, you’ll need to determine if they are properly qualified. Since this will be someone who will work with you or your loved one on a frequent and trusted basis, you’ll want to make sure the relationship feels good and this person is someone you are going to be comfortable working with.

Set up an initial meeting with them so that the daily money manager can introduce themselves and you have an opportunity to ask any questions you want as well as seeing if they have the type of personality you would want to work with. A daily money manager should not charge for this initial meeting unless there are particular circumstances that would warrant that, and that you are told up-front about these fees.

While all daily money managers will provide a core set of services, you may have a particular situation that requires some additional services. You should ask for a list of all of the different services each candidate performs. Here are some questions to ask each candidate you interview:

  • How long have you been doing this work?
  • What types of clients do you have? Elderly? Busy professionals? Small business owners?
  • What kind of insurance do you carry?
  • What professional organizations do you belong to?
  • What are the costs of your services and how do you bill?
  • Can you provide references?

Remember that this is a relationship, so you should feel comfortable with the person you will be working with.

Red Flags During An Interview or After Hiring

There are a couple of areas where red flags should go up when interviewing or working with a daily money manager. These can help determine if a person is acting professionally or if they are perhaps looking to take advantage of the person they are working for.

  • Someone who offers to do anything and everything with no limits or boundaries. This person is not likely a professional daily money manager, but more of a household manager. While some DMMs will provide family office services, which often includes non-financial coordination of running the household, they will be up-front in describing their services and what they can and cannot do.
  • Someone who wants to control everything and leave you out of the picture. DMMs will not control or want to control your finances. Their job is to assist YOU with these tasks in an open relationship with you or another accountability party. People who want to take over and control things are usually scamming or grifters.
  • Someone who is not transparent with all of their work – providing regular reports to either the client or a POA or other designated person to help hold accountable. DMM’s want to take off the burden of you having to do these household financial tasks, but still provide you with both an overall and a detailed view of your finances. Any time you feel something is being concealed from you is time to bring someone else in to check into what is going on.

This Can Work Wonderfully

Since DMMs are financial professionals, this relationship can become a most rewarding one. One woman told me how she really loved living in a facility that took care of all of her meals, her cleaning, and her laundry. As she put it, “I’ve cooked and cleaned long enough for my family, and it is time for someone else to do it for me.” Likewise, many of my clients consider me a trusted individual to whom they can look to for advice (when I am able to provide it) and referrals when they need additional services. In the same way that this woman was ready to have someone else manage the cooking, DMMs provide that opportunity to let someone else manage the finances. With a good fit comes the peace of mind knowing that the financial aspects of running a home are taken care of by someone you trust.