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Overspending? Paycheck2Paycheck? Compulsive Debting?

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440792Someone who is overweight may opt to seek out a personal trainer. A parent with a dirty home may decide to call in someone to conduct professional cleaning services. It can be a bit trickier when someone wants to tackle their debt and overspending habits. This is a good time to call up a money manager.

Money managers (otherwise known as MMs) are responsible for undertaking the simple, yet bothersome financial obligations of a client.

According to Jonas Brown, author of Breaking the Paycheck to Paycheck Cycle and the owner and founder of Sacro Capital Group based in Castle Rock, Colorado, MMs manage the personal administrative and financial business of individuals, families and seniors. They also handle other “business” matters that people like to avoid, such as the following:

• Payment of bills
• Organization of mail
• Drafting of cash flow reports
• Resolution of disputes with creditors
• Reconciliation of accounts
• Creation of digital financial file systems
• Establishment of emergency and savings funds

Doesn’t this sound great? Wait, it’s even better than that. A dedicated money manager will work around a personal schedule, and some of them will even come to one’s house to conduct this work.

If the reason behind overcharging is the fact that consumes had (or currently have) a nonexistent or disorganized credit and cash plan, one would find a money manager to be especially beneficial. He or she will be able to educate their client on the types of budgetary and payment issues are most common, as well as pinpoint the ones with which seem to have the most difficulty. A money manager would work diligently to create a spending plan that is simple and straightforward.

Jonas Brown who earned the title “Money Manager for the Common Man” by Denver’s channel 2 news, states that, “MMs look thoroughly at client’s transactions to determine where and how they are spending their money. They also consider whether it is coming out of savings, checking, or credit card accounts.” He also says, “If the individual were to follow guidelines for spending that are specific to each account, he or she would be successful at avoiding debt.”

Several of Brown’s clients have stopped using credit cards since they started to work with his firm on their financial issues.

What money managers do is undertake the more tedious and time-consuming tasks, like consolidating the client’s accounts. This helps avoid having to talk on the phone to agents for several hours. A money manager would call around in order to get high interest credit card account balances changed over to ones that have lower rates. Then, they would put a priority on them to make it so that they can be efficiently deleted from one’s debt.

A good money manager should also create spreadsheets that show the length of time it takes to pay off each card. This only will serve to make a client more motivated and to stay on track.

It is excellent to achieve a positive net worth, but it can be difficult to keep it at that level. In many instances, a money manager helps their clients and setup for  changes in their habits and helps them stay on track.

Brown says that many of the people he works with do not realize how severe their overspending problems really are, then they look at a cash flow report that outlines their long-term spending. These numbers show the big picture of what is going on. After the client has recovered from their shock, he talks about those numbers and how it got to that point. They then discuss setting goals and how they would like things to turn out.

Issues such as compulsive debting are a bit more troublesome. The money manager likely would have to be more creative when it comes to such matters, and be more of an authoritarian. Brown says he had a client with a bad shopping addiction who was unable to quit using credit accounts. He had to put the credit cards into a bag with some water, then into the freezer. The client was frustrated but this gave her some extra time to think about her actions as that bag would melt before she was able to use them.

It is up to a client to decide to make the necessary changes to a more healthy approach with their spending. Money managers can give individuals the knowledge and insight to move forward, but they cannot be money police. It is important to talk about things in a way that is not overwhelming and makes it easy to understand how the clients habits can harm them in the long run.

Fighting with a spouse about money troubles? A survey from the American Institute of CPAs that was conducted in 2012 found that American couples had arguments about their financial issues three times a month, on average. The way that a money manager can help is that he or she will serve as an objective professional and mediate these tense topics with a comprehensive plan for each individual’s desires and needs.

Brown says, “Couples are more willing and comfortable with talking about money when they are by themselves.  Really, they are more honest, I find myself acting as a good listener, knowing that what both parties want is simply to be heard. Once they each feel as though they are being understood, the money manager can talk about budgeting and point out beneficial resources.”

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