Have never heard of a daily money manager (DMM)? It’s not something that you will hear anyone readily admit, but most people are lousy money managers. And, we’re not talking about sophisticated portfolio management or financial planning; we mean the day-to-day task of keeping the household financially afloat by managing a budget, paying the bills, balancing the check book, paying down debt, staying organized, finding ways to save – all those things that people know they have to do, but either can’t or won’t due to a lack of knowledge, time or accountability.
How else do you explain the fact that American’s still hold an average of $16,000 of credit card debt paying an average of 13% interest? Or that less than 5% of Americans currently put away any savings? Poor money management is endemic across the entire economic strata and there doesn’t seem to be a self-cure. Enter the Daily Money Manager – the money doctor is in the house.
Chances are that you have never heard of a daily money manager (DMM). You won’t see them advertised because they generally work off of referrals, and you probably won’t hear many of your friends talk about them because, well, who wants to admit they can’t handle their personal money matters? But, they’re out there, and they come fully equipped to whip you into money management shape, or if you prefer, they’ll simply take the load off of you so you can focus on other priorities.
DMMs aren’t just for the financially inept or financially strapped. The ultra-wealthy also use DMMs, known in those circles as family officers to do precisely the same thing. The reality today is that many people – from single moms, to widows, to busy entrepreneurs, to successful CEOs – can be easily overwhelmed with the demands of daily money management.
A DMM can step in to keep your money flowing and keep you out of trouble. They can be especially valuable for decoding complex insurance or government programs, such as Medicare, Social Security, and health plans, to ensure you are optimizing the benefits available to you.
Among the multitude of tasks and responsibilities a DMM will undertake are:
- Organize your personal finances, including filing systems, online accounts, and setting up your personal financial software like Quicken or Mint.com
- Set up a bill paying system. They will either pay the bills themselves or automate your bill pay
- Conduct an analysis of your cash flow and spending habits to show you where you can save or pay down debt faster; they will help you create a budget, a spending plan and generate cash flow reports
- They will work with your creditors to resolve disputes or negotiate better credit terms.
- On a daily, weekly or monthly basis they will reconcile your accounts, sort your mail, pay your bills, and track your spending.
- They will restructure your debt situation by consolidating accounts and transferring high interest balances.
Choose Your Daily Money Manager Wisely
People get into financial trouble for any number of reasons, and the DMMs job is to assess the situation and prescribe a remedy. Depending on a person’s or family’s particular needs, they can be a financial handyman, fixing leaks; they can be a therapist of sorts working with married couples to resolve financial disagreements; they are a coach, holding their clients accountable based on a game plan they agreed to follow. They can be an educator and trainer to empower you, or they can be a surrogate to free you of the daily burden of managing your finances.
Obviously, a DMM can play a vital role in your financial life, and when you choose to work with one, you are entrusting to them your most sensitive information. So, selecting a qualified and competent DMM is extremely consequential.
DMMs are largely unregulated and certification is not required; however, they should at least be a member of the American Association of Daily Money Managers and ascribe to its code of ethics. Certification requires 1500 hours of DMM experience and passing a proctored exam. You can expect to pay a DMM an hourly rate of $50 to $75. Typically, they offer a free initial consultation.
When selecting a DMM, you should follow a strict process of evaluation, including:
- Obtain a resume that details work and educational background and experience that can be verified.
- Ask for a minimum of two references.
- Check to see that the DMM is properly insured and bonded.
- Check with state agencies and the BBB for complaints.
- Verify any credentials, such as CPA or CFP with their respective governing boards.
A DMM for Your Wallet?
Not keen on hiring a DMM just yet? No problem. There are a number of tools and resources you can use on your own to organize and automate many aspects of your money management. If your focus is on debt management, there is even a credit card that offers several debt payment plans to fit your particular money management needs.
Chase’s Blueprint program, available in its Slate card enables you to map out a repayment plan based on your budget, your spending habits and your need for accountability.
You can choose Full Pay, where you decide which purchasing categories to pay in full. You can choose to Split your plan to pay off large purchases based on how much you want to pay. You can also select the Finish It plan in which you can set a target date for payoff and arrange payments around your budget. And, you can Track It to identify your spending patterns, set spending goals and track them to ensure you stay on track.
To a great extent, it’s like carrying a DMM around in your wallet.
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