Elderly people often have trouble paying the bills on time. A low-cost daily money manager can help.
Eighty-year-old Norma McNeal is a Parkinson's sufferer, an avid reader and a political junkie. So the last thing she needs to worry about is whether her utility bill is paid on time or whether she has enough money in her bank account to get through the month. "How could I keep track of things when I can't even sign my own name?" she asks.
About a year ago, McNeal found the solution: She contacted the PIMA Council on Aging in Tucson, Ariz., to help her manage her bills and maintain a budget. The nonprofit organization assigned her a volunteer daily money manager (DMM) — a woman named Chris Curry — who now comes to McNeal's home twice a month to open her mail, pay her bills and balance her checkbook. "Now all I have to do is glance at my mail, put it in a box in the kitchen and know that Chris will take care of it," McNeal says. "I don't know what I would do without her."
Nearly 10 million seniors live alone, according to the National Council on the Aging, and many of them could use some assistance keeping their finances straight. Family members can often lend assistance, but if the kids live far away or if the elderly parent is reluctant to burden a relative with the problem, bills and budgeting can often fall by the wayside. For folks in those situations, a DMM can be a godsend. Paying the electric bill on time might seem like a small gesture, but it can help seniors maintain their independence, says Stew Grabel, an ombudsman with PIMA Council on the Aging. That's no minor achievement.
Think of a DMM as a personal financial assistant — a professional or volunteer who can sort through the mail, pay the bills, balance the checkbook and help maintain a budget. A DMM will even monitor bank statements to make sure no one — such as a home health-care provider — is dipping into the client's funds.
A DMM will also keep track of those onerous medical bills and Medicare forms. And if need be, he or she can even negotiate with pesky creditors and financial institutions to clean a client's credit. All too often, seniors forget to pay their bills on time or bounce checks before they or a family member realizes assistance is needed.
"Our clients are competent people, but as they age some of them lose track of time," says Barbara Freeman, who runs the Bill Payer Program for the Family Services of the Mohawk Valley in Utica, N.Y. It's not uncommon for new clients to have three unpaid cable bills piled up before volunteers get them back on track, she says.
How much does a DMM cost? Private firms charge anywhere from $30 to $100 an hour, says Pat Manalio, president of the American Association of Daily Money Managers. Clients should expect to pay for at least four hours of assistance per month. Low-income seniors, however, might qualify for free services through a local charity or the local Office of the Aging.
Those fees might sound steep, but consider this: When bills aren't paid, seniors run the risk of having their utilities shut off, or worse, losing their housing, warns PIMA's Grabel. Should that happen, there's a good chance a social worker or family member could take the matter to court, seeking to label the senior as incapacitated, which means complete financial control would be turned over to a court appointee.
Finding a Good DMM
The No. 1 concern when hiring a DMM is finding someone trustworthy. Unfortunately, like the financial-planning industry, this profession isn't regulated at the federal or state level, which means anyone can hang out a shingle.
The best way to protect yourself or a loved one is to find someone through a referral. If you don't know someone who employs a DMM, try contacting the American Association of Daily Money Managers, the AARP or a local nonprofit for elder-care services. While some accounting and law firms will provide this service for seniors, chances are they charge more than the going rate, since this isn't a business most of them want to be in. Most banks pay bills only for clients who've set up trusts at that institution.
Once you've found a few potential DMMs, make sure you interview them to find the right fit. On the AADMM's Web site, you'll find a list of questions to ask. Among the most important things to consider is whether that person is bonded for a certain dollar amount, like $10,000 (in other words, if the DMM runs off with up to $10,000 of mom's money, she's covered), and if he or she is affiliated with a local organization. Also, be sure to ask for references.
Although most professional DMMs are legitimate, there's no shortage of people who want to take advantage of the elderly. Extra precautions are in order. PIMA's Grabel recommends setting up a checking account with limited funds from which a DMM can write checks. Seniors should then make sure they sign all of their own checks, and ask the bank to look out for forged signatures.
It's also a good idea to have Social Security and pension checks direct-deposited into the client's bank account. And whenever possible, an adult child should have a copy of all bank statements, says Harry Margolis, an elder-law attorney and president of Elderlawanswers.com. Finally, a DMM should never restrict access to the client's records. If you feel you're being kept in the dark, take this as a sign of trouble.
Caveats aside, finding a good DMM can provide enormous comfort and relief. Just ask McNeal. "Chris (her DMM) has been a blessing twice a month," she says. And with the presidential campaigns heating up, McNeal can now focus on more enjoyable pursuits.