Daily money management (DMM) programs provide personal financial assistance to older Americans who can no longer handle certain aspects of money management. Whether an older person needs comprehensive help or just a monthly reminder to pay bills, these programs can mean the difference between living independently and residing in a nursing home. DMMs also offer relief to family members who are providing care to their older parents or relatives. (For more tips on how to assist an elderly relative with their finances, see Nolo's article Helping Elders Manage Money & Finances.)

Although DMMs can be lifesavers, they also come with significant risks. To avoid problems, you should first understand what a daily money manager can and cannot do, how the various DMM programs differ, and how to choose a DMM.

What Is a DMM?

Daily money management (DMM) programs help people who cannot handle their own financial affairs. Essentially, a daily money manager acts as a personal financial assistant. According to a survey conducted by the American Association of Retired Persons (AARP), the kinds of services that DMMs provide most often are:

• paying bills
• maintaining financial records
• preparing budgets
• balancing checkbooks, and
• negotiating with creditors.

DMMs can also prepare checks for clients to sign, help older people organize bank and financial records, prepare and deliver bank deposits, gather documents for tax returns, help decipher medical bills, and review bank statements in order to detect potential financial abuse or fraud.

It is important to know what DMMs cannot do. They are not financial or legal professionals, so they cannot act in an advisory capacity or prepare tax returns. But a good DMM can provide referrals to professionals like accountants, investment advisors, and lawyers.

How DMMs Can Help Elders and Their Caregivers

DMM programs can be valuable for older Americans who:

• cannot keep track of bills and financial documents
• often forget to pay bills
• cannot write checks because of arthritis or other health problems
• have trouble getting to the bank
• can no longer manage money or finances, or
• are susceptible to financial scams.

There are many upsides to helping an older person handle their finances. Here's a look at a few.

Help Maintain Independence

Studies show that DMM services can help seniors remain in their homes longer and avoid costly nursing home care. DMMs ensure that bills get paid on time, checks are deposited, and taxes get paid. This helps avoid eviction, foreclosure, utility shutoffs, and other debt trouble.

Relieve Burden on Caregivers

In most cases, when elders need help managing money, adult children or relatives step in. Yet often adult children live far away or have busy lives that make daily, hands-on money management difficult or impossible. DMMs provide adult caregivers relief from some or all daily money management tasks. Ideally, the elder's children or relatives should oversee the DMM's performance.

Protect Against Scams

According to the National Center on Elder Abuse, DMMs can play a role in protecting the elderly from financial abuse or scams. DMMs can review bank and credit card statements, looking for signs of abuse or fraud -- such as large, unexplained withdrawals of money, checks written to charities or other groups in unreasonably large amounts, or any other suspicious activity.

How DMM Services Are Provided

Older Americans can obtain DMM services in a number of ways.

DMM Services Offered Through Elder-Assistance Agencies

Often DMM services are provided through a larger umbrella organization, such as a private nonprofit elder assistance organization or government agency. These agencies often use volunteers to provide basic DMM tasks, such as bill paying. To find an elder assistance agency that provides DMM services, contact your local Area Agency on Aging (AAA). (You can find the AAA in your area by using the federal government's Eldercare Locator at www.eldercare.gov.)

Professional For-Profit DMMs

In the past decade, an increasing number of individuals and private for-profit companies have started offering DMM services for a fee. Cost for these services varies by region, but is often between $25 and $100 per hour. According to one study, most clients need approximately four hours of services per month, but this varies according to the services needed and the complexity of the elder's financial situation.

The emergence of private, for-profit DMM services has caused some concern among eldercare professionals. When dealing with any company that provides services to the elderly and requires access to sensitive financial documents, the potential for fraud shouldn't be overlooked. Although a private DMM program may be well worth the monthly cost, use extra caution when selecting one for your older relative.

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