Last month AARP published an article about managing daily finances on a budget. I was honored to be interviewed and quoted in the article, providing my perspective both as a board member of American Association of Daily Money Managers (AADMM) and as a working daily money manager. Here are my thoughts on the article, the important points they made, and a few they missed.
AARP As A Resource
While I’ve been interviewed by other publications, I was particularly impressed with AARP. For this article on managing day-to-day finances, I was interviewed multiple times. The final touch point was with a fact checker. From this experience, I saw that AARP really takes their role as a resource seriously; they make sure the information they provide is accurate and well researched. If you are 50+ years old and not already a member of AARP, it’s well worth the $16 a year. And for the budget-minded ;)… you can save 10-21% by prepaying for up to five years. With all the coupons and discounts that are included with membership, the benefits certainly outweigh the cost (and, no, they did not pay me to say this!).
Kitchen-Table Money Management
The article focused on what I commonly refer to as kitchen-table money management. Just like it sounds, it’s the financial activities you typically do frequently such as paying bills and reconciling accounts. As a daily money manager, I also make sure that paperwork doesn’t pile up. Together with my clients, I also:
- Reconcile medical insurance claims
- Review mail to find bills, reduce unwanted subscriptions/solicitations
- Shred unneeded documents with personal and confidential information appropriately
- Provide monthly reports
- Assemble documents and summaries that CPAs, estate attorneys and other professionals need
- Create workable spending plans
- Identify billing errors
- Research how to save on services and avoid fees
- Set up filing systems
Other (Pleasant) Surprises
For senior clients, hiring a daily money manager can mean:
- Staying independent longer. According to nursing research on the Clinical Outcomes of Aging in Place, it’s no surprise that seniors fared better psychologically when they remained in their home. By staying in familiar surroundings, seniors experienced decreased levels of depression, exhibited better levels of cognition, and better functioning in daily living activities. Of course, each individual situation must be carefully assessed to ensure that a senior remains safe.
- Found money. I often save my clients in late fees, overpayments, unclaimed funds, uncashed checks, etc. I even find lost accounts! For example, I once found a misplaced and forgotten $20,000 certificate of deposit. There have been instances where money is literally stashed in hiding places all over the house.
- Relieve Stress & Achieve Peace of Mind. Historically DMMs used to work primarily with wealthy families, we now work with all types of clients. My clients range in age from 30 to almost 100, they are busy professionals, and families as well as seniors. Life here in Silicon Valley is busy. Knowing that the day-to-day finances are handled is a huge relief. My clients retain control of their accounts; they simply get assistance in organizing and managing them. I’m also on the lookout for financial fraud and elder abuse which can provide peace of mind for family members.
Things Not Addressed in the AARP Article
There were a few things not included in the AARP article that I think are important.
People getting ready to retire are worried about their budgets. Ideally, they’ve been working on a financial plan for years, if not decades. Working with a daily money manager can help sift through the paperwork, create reports that provide an accurate view of the entire financial situation as well as create workable spending plan before and during retirement.
Fear of Being Left Behind
I’ve worked with divorcees, widows, and widowers. Learning to live without a spouse or partner is an emotional and difficult transition. Working with a daily money manager can be a lifeline.
It’s Not Just for Seniors
Financial and paperwork overwhelm can happen to anyone. Making sure your expenses don’t exceed income is a concern that has nothing to do with age.
How do you manage your day-to-day finances?