Addressing the Human Side of Money: Financial Therapy

Financial therapy is a new and growing area of financial assistance.

Whereas financial advisors and financial planners consult on how to invest, protect and grow money, financial therapists address the more human side of personal finances. They help clients work on the underlying emotional issues that keep them trapped in money struggles, be it overspending, under-saving or carrying too much debt.

There are many factors influencing our relationship with money including how our parents handled money, our own early experiences and mistakes, and our beliefs. Financial therapy can help clients examine their unfinished emotional business around money, allowing them to have a healthier relationship with it.

It delves into the past to help clients adjust the core beliefs underlying their behavior with money.

Financial therapists are mental health practitioners. They have had years of study and supervised practice, and have passed a licensing exam.

Financial therapists shouldn’t be confused with financial coaches. Both aim to assist people with financial issues and habits. Coaching, however, focuses more on the present and the future. It concentrates on the client’s current goals, and helps the client overcome blockages and obstructions to achieve more than he would alone. Financial coaches have also received training, but not as extensive as therapists. They are not health practitioners.

Neither financial therapists nor coaches can provide investment advice unless they are also registered as an investment advisor with the SEC or their state.

Could you use some help sorting out your money concerns? The article “Do You Need a Therapist or a Coach” by Bill Cole, provides a good overview of the similarities and differences between financial therapists and coaches, including a list of nine signs that one needs a therapist. Click here to read this article.

For advice on selecting a financial therapist, the article “Here’s How to Know If You Need a Financial Therapist” by Kate Ashford offers some advice. Click here to connect to this article.

To learn more about financial therapy or to locate a financial therapist, visit the Financial Therapy Association at www.financialtherapyassociation.org.

To learn more about financial coaching or to find a financial coach, visit the Association for Financial Counseling and Planning Education at www.afcpe.org.

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Financial Software for Teenagers? I Say Yes!

Considering I am a daily money manager, it won’t surprise you that teaching my daughter money skills is a high priority on my parenting to-do list. From an early age, my husband and I gave Gabrielle a weekly allowance. The purpose of the allowance, in addition to giving her pocket money, was to provide an opportunity for her to make money mistakes when the consequences were minor and to learn from those mistakes.

Eventually she started earning money from babysitting, pet sitting, odd jobs, and, this year, tutoring. There were also gifts from grandparents at birthdays and holidays. Eventually it was time to get the money out of Gabrielle’s bedroom and into a bank. I helped her open checking and savings accounts. She learned how to write checks, keep track of her debit purchases, view her transactions on line, and transfer money between her accounts.

Gabrielle also developed her own accounting method. I can’t tell you what it was exactly, but I do know it involved a vast spreadsheet and lots of time recording all of her transactions. As her homework load, social life, and number of paying gigs all increased, she complained about not having time to attend to her money. I suggested she try a financial software program which could potentially save her time. As Gabrielle will be heading off to college – and into greater independence – in another year, now seemed like a good time to show her a money tool she can use for life.

I purchased Quicken Starter Edition for her and spent a Sunday afternoon teaching her the program. This was actually fun. Having grown up with computers, Gabrielle was a quick study. She swiftly grasped categories and subcategories, transfers between accounts, and customizing each register. She loves downloading transactions from the bank and the quickness of data entry. And, she is having fun exploring the variety of reports and learning how to customize them.

Watching Gabrielle explore Quicken, I thought every teenager could benefit from learning a financial software program. Even when a teenager isn’t interested in tracking her spending, she most likely is quite computer literate. (Who taught you how to use your smart phone?) The programs and apps available now make recording transactions and paying attention to spending a snap. If a teen has some income and a bank account, now is a great opportunity to teach him a valuable skill.

In addition to Quicken, apps to consider include Mint, YNAB, Personal Capital, Mvelopes, and others. All can be used on a smart phone or tablet. Wherever the teen is, so is a picture of her available cash and recent spending.

Many of these programs include investment tracking. While most teens may not need this function at this point in their lives, the key features these apps offer are cash flow management and budgeting.

I recommend letting your teen choose which program to use. And let him make it his, separate from Mom and Dad.

Here are some articles that review the many personal software apps available:

The Best Personal Finance Software by Reviews.com.

The Best Personal Finance Software of 2017 by Top Ten Reviews.

The Best Personal Finance Services of 2017 by PC Magazine.

Top 5 Best Personal Finance Software Apps for Mac, Android, iPhone, Online, and Desktop by AdvisoryHQ.

Best Personal Finance Software by The Simple Dollar.

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Do You Have Too Many Credit Cards?

Note: This is a guest blog by my colleagues, Rebecca R. Eddy and Gideon Y. Schein, of Eddy & Schein in New York and Los Angeles.

 Managing credit card debt can be a challenge for anyone. It is common for Daily Money Managers to find clients dealing with a number of extra credit cards. Unfortunately, with all of the promotional deals and pre-approval offers that come to one’s mailbox, it is very easy to amass a large number of credit cards and the situation can quickly get out of hand.

Recently, Eddy & Schein was called to help a client manage his finances. Frank had 13 different active credit cards, including department store cards with high interest rates. Some were getting paid regularly, others were being left, but most were not being paid in full and were collecting interest.

The first step was to identify the scope of the issue. A list of all the cards was compiled, identifying for each the outstanding balance, the due date, and interest rate. Frank was then asked to identify which two cards he wanted to hold onto. As part of the discussion, Frank was encouraged to get rid of his department store cards and he agreed. Next we slowly proceeded to pay off and close down his other cards. Once his credit card bills were in order, and their number was manageable, Frank was able to pay his bills on time and no longer carry interest charges.

Here are 6 Tips for Managing Multiple Credit Cards

1. Assess: Are there too many?
• We recommend having just one or two credit cards. If there is an American Express card, it is a good idea to also have a Mastercard/Visa card, which may be accepted where American Express might not.
• It is also helpful to have a backup card for use in case the primary card is misplaced or stolen.
• Consider which cards provide the greatest benefit.
• Can you get rid of cards from gas stations, department stores, etc.?
• Which cards have the best rewards?
• Which cards have the lowest interest rate?

2. Reduce if possible. If you want to close down some credit card accounts, there are things to consider:
• Which cards have automatic payments on them?
• Can you move all automatic payments onto one card?

3. Make a list of all automatic payments and keep the list safe so you know which companies to contact and update charge information if the credit card is replaced due to the card expiring or being stolen.

4. Maintain a good credit score.
• Put the credit card in a safe place but do not close the account. One of the elements of a good credit score is based on having a ratio showing your large capacity to borrow versus a low amount owed by you.

5. Track charges on your statements.
• People who commit fraud are able to get credit card numbers without having the actual card, so confirm that all charges are valid.
• Are there unnecessary charges such as credit fraud insurance on multiple cards?
• Has a donation to an organization accidentally become a recurring charge?

6. Be aware that some credit card companies will close cards without an explanation.

Special thanks to Eddy & Schein for use of this blog. Please feel free to contact them in New York at 212-987-1427 or in Los Angeles at 626-395-7572, or visit them online at http://www.eddyandschein.com.

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

 

Is It Worth Buying a Home Warranty?

Many people like to purchases warranties on big ticket items such as cars and appliances. Warranties are also available on homes.

A home warranty is a type of insurance providing service, repair or replacement on specific items in a home such as heating, air conditioning, electrical systems, garbage disposals, built-in appliances, and plumbing.

Contractors may offer warranties on newly constructed homes. Sellers may pay for a policy to facilitate the sale of their house. Homeowners also purchase them for their existing homes.

Should you purchase a home warranty?

Before you do, understand how these programs operate. Many consumers don’t understand they do not exist to refurbish your house.

  • Home warranties promise only to keep major systems and appliances functioning. They do not promise to purchase new appliances or install new major systems.
  • The warranty company decides whether to repair or replace the broken system or appliance. Since replacement is the most expensive, it is always the last option.
  • When you have a repair, you will also pay a service visit fee which could be as high as $100 per visit. This is in addition to the annual cost of the warranty.
  • The warranty company, not the homeowner, decides which contractor will make the repair.
  • Warranties cover only normal wear and tear. They do not cover problems that existed before the warranty went into effect.
  • If the company believes the system hasn’t been properly maintained, it may refuse to make the repair. 

If you are considering renewing or purchasing a home warranty:

  • Read the fine print before you sign up. You want to be certain you understand what the policy covers and what it doesn’t. Some policies, for example, will only make repairs. There may be many coverage exclusions.
  • Look for a home warranty company with a long-term history in your area.
  • Compare different warranty programs for coverage levels and deductibles.

Although this Angie’s List article was written in 2009, it has good information and tips on selecting a home warranty program.

An alternative to purchasing a home warranty is to set aside the money you would have otherwise spent on the warranty. Put these funds in a designated bank account. If you have an issue, you can then decide whether to repair or replace. If you repair, you can then choose your own contractor.

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

When Parents Reject Your Ideas

Trying to help parents with their finances can be frustrating. We may see clearly what we think our parents should do, yet they may refuse.

When it comes to parents and their money, adult children need to tread lightly. Parents may resent their children’s interference. They may fear they will lose their independence. We need to remember, our parents are adults and have the legal right to make their own decisions about all aspects of their lives including housing, health care and money. Yet when you fear for your parents’ health and safety and they refuse to budge, what can you do?

Here are lessons I have learned in my years working with clients of all ages. (Fifty-year-olds can be just as stubborn as ninety-year-olds.) 

Breathe deep, muster up patience, and expect some things will take time. While you may clearly see what Dad should do, if that action is not on his to-do list, it may take time for him to be willing to make a move. Perhaps he doesn’t understand why he should take a specific action. Or he may resent you “sticking your nose” into his business. Maybe he has a private, unvoiced emotional reason why he won’t agree to act. People need time to think about and accept changes, especially ones they did not initiate. You, meanwhile, need to be patient. 

Drop the subject. Bring it up again later. Ask about the objection to your idea. When I began working with Beverly, I found many undeposited dividend checks around her house. Most were too old to deposit. I suggested she arrange for direct deposit to her checking account. I received an immediate and strong, “No!” I dropped the subject and brought it up again a few weeks later. Again the idea was rejected. The third time, I asked Beverly about her objection. I learned she had a negative experience with companies auto drafting bill payments from her account. Once I understood this, I was able to clarify the difference between auto-deposits and auto-drafts. Beverly was then willing to consider direct depositing the dividend checks.   

Explain the consequences. Ann had dementia. Her daughter saw she was struggling and asked her to hire me to help with paperwork and bill paying. Initially Ann rejected the idea. Her daughter was able to tell Ann she feared if Ann did not accept help to pay her bills, eventually her utilities would be turned off and she would be forced to move to assisted living. Thinking assisted living was the dreaded nursing home of her parents’ generation, Ann reluctantly agreed to accept help. With assistance, Ann was able to remain in her home a few more years. 

Present your ideas as something to think about, rather than orders and ultimatums. Then give your parent time to process and think. Peggy owned rental properties. She was also in the early stages of dementia. When the rent checks arrived, she hid them in books to keep them from being stolen. It was a treasure hunt to find them each month and sometimes I needed to call the tenants and request replacement checks. Rather than telling her she had to have the checks sent to me so I could deposit them, I asked Peggy to consider this idea. I explained although the books may seem like a safe place, the checks were getting lost. She needed the money in her checking account to pay property taxes and other bills. It was also unfair to the tenants to not have their checks deposited quickly. After she had time to process this information, Peggy agreed to have the tenants send me their checks. Each month I presented her with a photocopy of the rent checks and a deposit slip. 

Consider whether it is best to leave things alone. David, who was in his 90’s, was sending $2,000 a month to his sixty-something year-old son. At the same time, David’s assets were quickly dwindling. Clearly, it made no sense for David to be giving away money to an adult who was close to his own retirement. Yet David would not consider discontinuing the checks. He worried his son could not otherwise afford his expensive medications. When I stepped back and looked at the overall situation, I decided to let it go. David was ill and wasn’t expected to live much longer. He felt strongly about giving his son money. In the end, he lived only another nine months.

Most of my ideas take time (sometimes months) and loads of patience. What if your parent doesn’t have the luxury of time? First, be clear on whether your parent truly needs to act now or whether it is your wish for him to make a move sooner. If he really does need to move quickly, ask your parent’s advisors for help. His accountant, attorney or investment advisor may be able to intervene. Many seniors have a trusted advisor with whom they have a strong relationship. Often the senior will listen this professional.

The names of individuals mentioned in this blog have been changed. This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Be Smart About Money This Week

This week is Money Smart Week®.

Created by the Federal Reserve Bank of Chicago in 2002, Money Smart Week® is a national education campaign designed to help consumers better manage their personal finances. This year the dates are April 22 to 29.

Money Smart Week is the collaboration of hundreds of organizations across the country including businesses, financial institutions, schools, libraries, not-for-profits, government agencies and the media. They come together once a year to stress the importance of financial literacy.

Do you seek advice on:

  • Managing student debt?
  • Better managing your money?
  • Understanding the importance of credit and how it works?
  • Challenging errors on credit reports?
  • Budgeting?
  • Teaching your children about money?
  • Investing or planning for retirement?

These are just a few of the topics that will be covered in free educational seminars and activities from April 22 to 29. The programming is offered to all demographics and income levels.

To learn about events in your area, participate in webinars or access online resources, visit http://www.moneysmartweek.org. or do an internet search on “Money Smart Week 2017.”

You can test your financial literacy at these sites:

 This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

A Tale of Two POAs

This is a tale of two agents by power of attorney.

Our legal and financial advisors tell us we need a durable power of attorney for finances. With this legal document we name an “agent” who will manage our finances should we not be able to ourselves.

Some people name one agent. Others name an agent and a successor agent. I recently witnessed how the difference played out for two separate families.

Caroline named her daughter as her agent by power of attorney. Her daughter, Lilly, assisted her until Lilly had a personal crisis and had to resign. Since Caroline had not named a successor to her daughter, a social worker helped Caroline find a professional willing to serve in this role. Although Caroline had dementia, her advisors determined she had the capacity at that time to understand and sign a new POA document. As most new POA documents do, this one revoked all previous powers of attorney.

Now, a few years later, Lilly is able and willing to resume serving as her mother’s agent.  Caroline’s dementia, however, has advanced to the point where it is clear she would have no understanding of what she was signing, even if she could sign her name. Caroline thus cannot reappoint her daughter as her agent. While Caroline is now oblivious about the situation, her daughter is distraught. Lilly wants very much to serve as her mother’s agent as she believes this was Caroline’s wish. But, due to the advanced stage of her dementia, Caroline cannot sign another POA document.

Bess’ family had a different experience. In her power of attorney document, Bess named her daughter, Jean, to serve as her agent. She also named a successor, her grandson Jack, should her daughter decline to serve. Jean was serving as her mother’s agent when a tragedy struck her immediate family. Jean needed to step down. Jack then assumed this role and attended to Bess’ financial affairs. The transition was smooth.

A few years later, Jean was able to serve as her mother’s agent once again. Since both she and Jack had been named in Bess’ POA original document, when Jack stepped in to serve, a new POA document, revoking all previous ones, did not need to be written. Thus Jean’s appointment was still in place when she was ready to serve again.  She and Jack shared the responsibility until Bess’ recent death.

Since I am not an attorney, I cannot provide legal advice. I can, however, tell you the experiences of two different families and let you draw your own conclusions.

None of us can look into a crystal ball and predict what will happen in the future. But we can learn from others’ experiences and do our best to make our plans and wishes as solid as possible.

Some people named co-agents. Seek the advice of legal counsel to determine what is best for you or your loved ones. The names of individuals in this blog have been changed to protect their privacy. This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Too Good to Be True: The Bill Paying Scam

Just as I completed my last blog about protecting yourself against scams, I came across this warning from the Federal Trade Commission (FTC):  The FTC warns con artists are targeting church communities with a bill paying scam.

Since assisting clients with bill paying is one of my services, I was greatly concerned.

The FTC says swindlers claim a government program will pay your monthly bills for an up-front fee. Unsuspecting church-goers fall for this scheme. They learn about it at church, and, since they trust their church, believe it is a legitimate program. Their church leaders don’t understand it’s a scam.

The scammers charge an up-front processing fee and ask for personal and bank information so they can pay your bills electronically. Instead of paying your bills, however, the thieves now have enough information to clean out your bank account and steal your identity. In addition, you still owe money for your bills, may incur late fees, and have lost the fee you paid to the scammer.

If you are pitched a bill paying service that requires an upfront fee, be extremely suspicious. There is no government program that will pay your bills for a fee. There are legitimate government programs available for eligible people who need financial assistance to pay medical, energy and other necessary bills.  Recipients of these funds need to apply for these programs. And, the aid programs won’t charge a fee.

If you desire a service to help you send your bill payments, seek one out. Ask your trusted advisers such as attorneys, investment advisors and accountants, for recommendations. Daily money managers (DMMs) assist clients with bill paying. You can find a DMM by visiting the American Association of Daily Money Managers (AADMM), whose members are required to follow a code of ethics. (Disclosure: I am on the board of AADMM.) A good DMM will work to help you identify scams. If you can’t locate a DMM, a business bookkeeper may be willing to assist you.

Before your hire a daily money manager or any bill paying service, ask:

  • How long have you been in business?
  • What professional insurance do you carry?
  • To what professional organizations do you belong?
  • What is your professional background?
  • What are the standards of practice and code of ethics to which you adhere?
  • Do you have any professional certification or designation? (AADMM offers a voluntary Professional Daily Money Manager {PDMM} certification to its members.)
  • Do you take continuing education courses?
  • What are your fees and how will I be charged?
  • Can you provide a professional reference list?

Scam artists are extremely creative, trying to steal our money and identities when we are least suspecting it. Targeting members of a faith community is abysmal. The whole scam business – targeting any and all individuals – is appalling. But, as long as they make money, the con artists will continue. It is up to us to be vigilant and suspicious when approached with an offer or service for which we did not seek, which sounds too good to be true, or requires an up-front payment.

By Robyn Young

Money Care, LLC

 

Resources

Federal Trade Commission (FTC) The Federal Trade Commission, the nation’s consumer protection agency, works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. A wealth of information is available on its website.

FTC article, A Government Program That Pays Your Bills?

Legitimate government sites that connect you with assistance programs

American Association of Daily Money Managers (AADMM)

Protect Yourself from Scams: Stop and Think by Robyn Young

Beware of E-mail Scams by Stephanie Raccine

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

 

Protect Yourself from Scams: Stop and Think

If scamming people wasn’t so profitable, there wouldn’t be so many con artists tricking people out of their money. There are many types of scams. Here are three which recently happened in my world:

1. My mother answered the phone to this greeting: “Hi Grandma, I’m in Florida to attend a funeral.” Evidently my child was in Florida, ran into trouble, and was looking for money to be bailed out of jail.

2. The IRS left two messages within three weeks on my answering machine telling me the agency is suing me. The recorded message included a phone number to call back. My friends received the same message which terrified their teenager when she retrieved messages.

3. The treasurer of an organization received an e-mail from one of its service providers telling it to wire a $3,000 down payment for a new project. The project had been discussed at a recent board of directors meeting. The request seemed legitimate as the author of the message knew about the board’s discussion. The service provider is also one of my providers, and sent an e-mail to all

How can you avoid falling for these and other scams?

Before you respond, stop. Breathe. Think. Keep emotions from taking over. Ignoring pressure to act immediately allows you to evaluate any request, even those from people you know. It gives you time to determine whether this is a legitimate request for your money or personal information. Ask yourself:

• Did this request for my information or money come out of the blue?
• Do I know and trust this person, company or government office?
• Is it a reasonable follow-up to a transaction I initiated?
• Is it unusual or out of character for this organization or person (especially when I know them) to be asking me for money or information?
• Is this the normal way this company, person or government agency communicates with me?

Before responding to any request, contact the individual, agency or company to verify the request. However, do not reply to questionable e-mails, click on any links in e-mail messages, or return calls to phone numbers left on your answering machine.  Instead, call the person directly. Contact the company using your own information sources. Note that statements and invoices will usually include correct website addresses and telephone numbers.

Understand that anyone can easily change the “from address” in their email program to make it look like the message is from a company or a person you know. E-mail addresses are available everywhere. If the message is strange, be suspicious.

Be aware that logos on fake websites often look legitimate. Logos can be copied directly from the real websites.

Recognize these dead giveaways of scams:

  • Demands or pressure to send money immediately
  • Instructions to wire money
  • Requests for your personal information over phone or via e-mail (even when the requests seem legitimate or you feel threatened)
  • Blocked caller ids preventing you from identifying the caller
  • Instructions to send money to claim a prize
  • Family members calling out of the blue from odd locations

If it is immediately clear someone is trying to con you, hang up the phone or delete the e-mail message. Don’t engage the caller no matter how nice he seems or no matter how much she knows about you. Don’t apologize or give the caller time to respond. Be rude and disengage.

What happened in the cases I mentioned above?

Fortunately my mother thought it strange my child was in Florida attending a funeral, and not in school. She also knows it is out of character for my child to be in jail. She told the caller to contact his parents and hung up.

I ignored the fake IRS call. So did my friends. I know the IRS contacts people only by mail, not phone. Nothing from the IRS arrived in either my or my friends’ mailboxes.

Unfortunately, the organization went ahead and wired $3,000 before researching whether the request was legitimate. The e-mail seemed legit, it even had the correct details, names and e-mail addresses. All this information, however, including the recent meeting minutes, was available on the organization’s website. There were two clues this was a scam:

1. The request to wire the money
2. This particular service provider always sends invoices via US Mail.

If you are ever in doubt:

  • Talk requests over with financially-smart people you trust such as your accountant, other professional advisors, or a money-savvy family member or friend
  • Search the Federal Trade Commission website FTC.gov 
  • Visit the online Better Business Bureau Scam Tracker at bbb.org/scamtracker/us
  • Contact the fraud division of your local police department

For more information on e-mail scams, click here.

By Robyn Young

Money Care, LLC

Special thanks to Stephanie Raccine for her contribution to this blog. This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

Managing a Loved One’s Social Security Benefits

When you are managing the finances for a parent who receives Social Security benefits, you may need to become her “Representative Payee.”

Social Security does not recognize guardianships, conservatorships or powers of attorneys. If you handle your family member’s money with one of these documents and you need to manage her Social Security benefits, you will also need to become her Social Security designated Representative Payee (“Rep Payee”).

A Representative Payee can manage Social Security funds only. When you are appointed an individual’s Rep Payee and you are not that person’s agent by power of attorney or financial guardian, you have no legal authority to manage the person’s other income or assets.

The person entitled to Social Security payments, i.e. your loved one, is the beneficiary.  As a beneficiary’s Representative Payee, you are his fiscal agent and receive his Social Security payments to use exclusively for his benefit. The SSA requires you to first pay for his daily food and shelter, and then for out-of-pocket medical and dental expenses, clothing and other personal needs. Remaining funds can be used to improve the beneficiary’s daily living conditions.

To become an individual’s Rep Payee, you complete an application and submit it to the Social Security Administration. The SSA investigates all people applying to become Representative Payees to protect its beneficiaries.

Social Security recommends you have the monthly benefit direct deposited to an insured bank account. Although the beneficiary can never have direct access to this account, Social Security requires the account to be titled in the beneficiary’s name with you as financial agent. The bank account may not be a joint account. You may not have any ownership of the account. You also may not comingle your own or other funds with your loved one’s money.

The Social Security Administration has several other rules, including:

  • The money must be spent only on the beneficiary.
  • You may not collect a fee from the beneficiary for serving as her Representative Payee unless the SSA has given you permission to do so. Most individual Rep Payees volunteer their services.
  • Every year you need to file a Representative Payee Report on how you have spent the Social Security benefit. To be able to complete the report, you need to keep records on how you used the money.
  • You need to save any funds left over after meeting your loved one’s day-to-day and personal needs. Social Security prefers you to save the funds in U.S. Savings Bonds or in an interest bearing bank account.
  • You must notify the Social Security Administration if certain events (such as marriage, a move, or a change in employment status) happen in your loved one’s life that may affect benefit payments.
  • You must notify the SSA when you will no longer be the payee.

This article provides an overview. There are many details to the Representative Payee program. For more information, visit www.socialsecurity.gov/payee.

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.