Low-middle income money management

[redjunkopera]

This is just a shot in the dark... I know there are people from all kinds of backgrounds on this board so I'm doing a little fishing to see what I can turn up.

I have a friend who is incapable of money management and it's constantly sinking her into a hole; I know there are a LOT of people who are incapable of spending their money responsibly also so I figure there has to be SOME kind of service in existance to help these kinds of people.

What I'm looking for is some kind of financial services that will sort of take on the responsiblity of managing someone's finances for them at a reasonable cost. I'm not talking about someone to give all of your extra money to so they can make you more money... I'm talking someone who your checks get forwarded to, they pay your bills, give you an allowance for food etc. You meet with them to go over allowances for non-essential spending... etc... sort of a financial babysitter.

I'm a scientist... this is out of my realm of expertise and google doesn't bring me up anything other than shady credit offer sites.

Does anyone know of such services? Sorry if this isn't SS worthy material, but I didn't know where else to post.

[guanna]

sign me up lol

[Moontayle]

Honestly, it likely doesn't exist for the lower tax brackets, because while I know it exists for the higher tax brackets, there's also a % that gets shaved off for the guy doing it. And 5% of shit pay just won't motivate anyone to help out. A guy would have to take on like 30 just to break even.

Best I can offer is find a way to hook her up with someone with good financial sense. A former co-worker of mine did that with his wife. He wouldn't let her touch the money, she had no credit cards, no debit card, and couldn't buy anything unless he was there to approve the purchase. I asked him why, and it basically came down to, "Bitch sold my Mercedes without asking. For a FUCKING Blazer."

[tikkus]

Its called taxes and public service.

[prescient63]

Those types of services are typically provided by wealth management firms, which she obviously doesn't have the assets for. An easy solution might be something akin to creating two checking accounts, have one automatically deduct from the other. The one that is making the deduction is her allowance. The other checking account has all of her bills come out of it. The bills could be set up to be paid automatically every month.

You could also just set up the checking account with automatic withdrawals and get her a credit card with a low limit. Low limit credit card is her allowance and everything else is automatically deducted from the checking account including the credit card monthly to pay it off.

Ive actually tossed around the second idea for myself as I have no idea what i spend, oh maybe, 60% of my money on. It may have something to do with the excessive amounts of alcohol I'm prone to consuming. Oh, just typing in bill pay services brings up Yahoo! Bill Pay, I'm fairly certain they are legit. Its just a hunch, and its only $5 month.

[Zarcath]

Just have her play WoW naked and charge for pictures, that'll get her some cash (or an epic mount).

[Soriak]

Might want to check a welfare agency (social services?) and see what they provide... social services here offer free advise on spending and saving and they'll work out a plan, but I don't think they actually handle the cash for you. I'd think the US has something like that as well, since it actually prevents them from having more people to support

Another thing you could do is have her surrender control of her account to someone else, who'll cover the bills with it and hand her some allowance every week or so. Obviously get rid of all credit cards and especially pay off any remaining debt on them. Interest on credit cards will eat up anything she might save... if it's not too much, get a friend to loan it to her interest-free to pay that off.

If she's down $5k, she may spend $80/month just on interest!



Also, the first step in getting better is to keep a journal of every expense she has over the period of a month. She should write down every cent she spends. (easy to set up, just do columns with date, description of expense (like 'food, store X'), amount)
This will also help her be aware of what she spends as she writes it down.

At the end of the month, sort the entries for the various groups (food, rent, clothes, public transportation, payments (like car), interest on debt, entertainment, whatever - enough groups to see where it's going, not so many that you only have one entry in each) and add it all up. Where does she spend the money, did she keep track of everything, etc.

The goal would be to balance her finances so that she can still, if at all possible, spend some on unnecessary stuff, while improving her situation. Nobody's going to stick to a draconian plan, so it's best to find a way to budget some entertainment in.

Also definitely make sure she doesn't save on health insurance (ie has some), or she's one bad day away from even more serious trouble.

[Lejina Bloodbath]

While someone else taking care of all her finances may be a good temporary fix, it's still no more than a crutch. That is if she can even find something reliable with literally no means to pay for it (a financially aware boyfriend could do the trick I guess).

The dedicated bank account for the monthly bills is a great idea btw.

To learn to deal with her budget herself would be the best idea long term I think. She needs to figure out what are her expenses : the no way around stuff (monthly bills, gas and food) her debts and finally her pocket money.

Tell her to keep absolutely all her receipts and take note of the stuff with no receipt (bar expenses, etc) in a notepad. The mountain of lill papers one can accumulate in a month is rather eye opening. As Soriak said, unless she's dirt poor, the idea isn't to cut all the superflous expenses, because no one is going to follow a budget that doesnt allow a beer and some pizza, but rather to cut the obvious bullshit that is a drain on the wallet.

[Millie]

Originally Posted by redjunkopera

This is just a shot in the dark... I know there are people from all kinds of backgrounds on this board so I'm doing a little fishing to see what I can turn up.

I have a friend who is incapable of money management and it's constantly sinking her into a hole; I know there are a LOT of people who are incapable of spending their money responsibly also so I figure there has to be SOME kind of service in existance to help these kinds of people.

What I'm looking for is some kind of financial services that will sort of take on the responsiblity of managing someone's finances for them at a reasonable cost. I'm not talking about someone to give all of your extra money to so they can make you more money... I'm talking someone who your checks get forwarded to, they pay your bills, give you an allowance for food etc. You meet with them to go over allowances for non-essential spending... etc... sort of a financial babysitter.

I'm a scientist... this is out of my realm of expertise and google doesn't bring me up anything other than shady credit offer sites.

Does anyone know of such services? Sorry if this isn't SS worthy material, but I didn't know where else to post.

Some people will never learn to control their spending, but you can at least try with her. Have her keep a journal/receipts/etc of EVERYthing she spends for an entire month (or two weeks, if a month seems too daunting). Then, at the end of that time period, look over the total costs with her. It's a fun little exercise that will (hopefully) get a point across about how her spending habits are far outstripping her earning power.

Then, you guys can separate the essential spending from the nonessential spending. And I'm sorry, because I know she'll claim things like jeans and tops and belts and shoes are "essential," but they're really not. Food is essential. Health care is essential. Rent is essential. Utilities are essential. Everything else is just lifestyle. And she'll have to realize that, in order to save money, she'll need to make cutbacks in the "lifestyle" column.

Budgeting is a task that seems incredibly complicated, but once you take an inventory of your spending habits, you can reverse-engineer a suitable budget pretty easily. For most people, this is an easier, more "fun," and more realistic way to develop a working budget than trying to draft one out of thin air and stick to it.