Managing All My Money Is Futile: Outsourcing My Finances

by Silicon Valley Blogger on 2008-04-0318

Money management and personal finance are activities that we all can’t escape doing — in fact, if we do a bad job with these tasks, then we immediately encounter the unpleasant results and feel the brunt of not being on top of our “money game”. We’ll see the results in the form of escalating debt or dwindling bank accounts. So it’s always best when we can take our own money issues by the horns and work it out ourselves — developing our own systems of money management, debt reduction, bill paying, investment selection and portfolio management.

At the same time though, not everyone is built to do their money management themselves. Although personal finance is something we can ALL handle if we put our minds to it, there are just people who really can’t and won’t find the energy and the interest in delving into this “world”.

I’ve always been a huge advocate of the “do your own finances yourself” mentality. I strongly believe that in most cases, nobody else can do a better job than yourself when it comes to handling your own finances, obviously because nobody cares as much about your own money as you do.

And I’ve insisted to my friends and family that they need to take a more active step with their finances, but no matter how much I nag, my recommendations aren’t going to be taken up by everyone. There will always be people who won’t be as fascinated about personal finance as I am. For those folks, the way to get some or all of their finances in order would be to offload these tasks on to someone else.

financial adviser

I’d like to be more realistic here and shed my battlecry of “do your own finances yourself!” and admit that yes, after you’ve delegated the tasks to either yourself and your partner — for instance, I do the investments while my spouse does the bill paying — then considering a third party to handle the stuff left over may be a wise thing. The next best solution for those who don’t want to spend all their time on a certain aspect of finance is to hire a professional to tackle that area. Works for me, since I prefer to cherry pick the financial tasks I prefer to do.

Doing My Taxes…NOT!

Case in point: I truly dislike doing our taxes. So I haven’t been doing them myself. It’s the tax preparation and day-to-day money management (bill pay, budgeting, etc) that I’m not too thrilled about, maybe because of the monotony and mechanical work involved. On the other hand, I absolutely love dabbling in entrepreneurial projects and investment pursuits, looking into ways to build wealth, increase income, develop alternative income streams and manage investments.

Not surprisingly, dealing with my first tax return as a sole proprietor was far from appealing. Dealing with receipts, spreadsheets, 1099’s and calculations was just not fun. However hard it was, I learned a valuable lesson. Let someone else do it. Without the experience of dealing with a complicated tax return, nor the system or process to make it a less than hairy exercise, my best bet was to consult with a tax expert.

Why Outsource Your Money Management?

Granted, there are some of us stubborn enough or perhaps experienced enough to do all our finances on our own. But when should you reconsider this approach? When is it time to outsource and pay for outside help? Possibly when you:

  • are not too excited about finance
  • finally understand your limitations when it comes to money matters
  • nobody else you know is willing to help you for free
  • have more challenging money issues
  • have no time
  • have a lot of wealth to manage and can afford a lot of professional advice.

I’d go to an expert if I’m absolutely certain that I’m just not cut out for the financial task at hand. If there are legalities involved, or complicated matters I can’t just resolve with research, or if no answers materialize even after I’ve poured through stacks upon stacks of financial reading material, then offloading this work (and subsequently my worries and concerns) on someone else becomes a relief.

How To Outsource Your Finances

Those who find themselves solely responsible for their own accounting, money management or financial duties but who also find math to be an alien form of communication should weigh the pros and cons of outsourcing some of their responsibilities. Some common-sense recommendations that will help you get the most from hired financial help:

  1. Find someone to help you who is professionally licensed but who may just be at the cusp of growing their own business. Not only will you grow your financial network, but this licensed professional may give you the best rate because he wants your business.
  2. Determine how much you’re willing to pay for the financial service. Finding out and comparing the fee structures and rates for various financial services will help you determine whether getting professional help is worth your money.
  3. Do your research and talk to different companies. Do not call AAA Accounting because they are the first listing in the phone book. Ask for referrals from people you know, or start with financial resource sites like My Financial Advice.
  4. Screen your financial experts before signing up with them! Part of your screening process should include background checks via the Better Business Bureau, SEC, FINRA (a security firm regulator) or even NAPFA (National Association of Personal Financial Advisors).
  5. Find someone you can easily communicate with. After all, you’ll hopefully be working with them for a long time to come. You want someone you can trust, rely on, and who generously answers your questions.
  6. Keep your financial adviser (or hired money professional) updated on your pertinent life and financial activities. When you figure out who you want to work with, don’t just hand over your financial records and run away. Request guidance from your hired financial expert and try to keep abreast of your own finances. In the end, you’re still ultimately responsible for your money.
  7. Learn from your money professional. As I’ve mentioned, stay involved with your finances. Since you’re paying for their work anyway, why not leverage your time with your hired experts to ask questions and educate yourself about finance.

There are definitely some things I’d rather have others do, because frankly, they do a better job with those tasks than I do. For me, the trick has been to find the happy medium between stuff I can work on myself vs things I can outsource. By delegating the right things to the right people, I’ve found ways to free up additional time during my day and have been able to focus on work that essentially helps pay for these financial services, and then some!

In short, if you don’t want to manage your money, have someone competent do it, rather than simply procrastinating or sweeping it under the rug and having it fester. ;)

 
Image Credit: Shane and Peter

Copyright © 2008 The Digerati Life. All Rights Reserved.

{ 14 comments… read them below or add one }

The Financial Blogger April 3, 2008 at 5:57 pm

Being a Financial Planner, I could not agree more with your article ;-)

Seriously, I have many clients who are making a lot of money but they definitely not into the “manage your personal finance” game because they find it boring.

Having someone that you can trust to take care of your investments, debts and retirement planning is priceless for them.

Four Pillars April 3, 2008 at 7:40 pm

I hear ya on the tax preparation. I’m more than capable of doing my taxes (not overly complicated) but I just don’t like it.

On the other hand I don’t like paying the fees… :)

Mike

emilyg April 4, 2008 at 7:57 am

I think that people should definitely make a concerted effort to be in charge of their finances as much as possible. You know yourself better than anyone, and it will also be an interesting learning process. However, I agree that taxes can be difficult and complicated for the average person, and because the repercussions for making mistakes in your taxes can be much greater than slightly messing up a budgeting for a month, investing in an accountant for tax time is not a bad idea. It may also be worth it to spend a little bit of money on meeting with a financial planner to learn the basics of money management, then take it all on yourself rather than letting someone else completely manage things for you. It would make me feel better to be in charge of my own money.

Jagdu April 4, 2008 at 10:55 am

While I think investments are a great thing to outsource I don’t know if I would outsource my “finances” which I consider my monthly income. That is the kind of task that should stay with me.

Terry April 5, 2008 at 2:14 pm

I am sure there are a number of people making lots of money with no financial management ability or understanding. However, I can’t believe that they are not the exception.

For most of us, if you want to get ahead, you better understand the numbers. It is always what you spend, not what you earn. You need to know what is going out the door, what is being invested, what returns you are receiving, what risks you are taking, how diversified you are, etc., etc, etc.

I just can’t imagine the average person getting very far ahead if they can’t manage their own money and investments.

Frank Crowe October 2, 2008 at 10:14 pm

India has become the favorite country for outsourcing because there is an abundance of talented people out there. In India there is a huge population who understands and speaks English very fluently. Which is a not so common feature in any other part of Asia? The most important thing that outsourcing has provided is employment to thousands of people.

Charlotte IT Outsourcing October 30, 2008 at 8:15 am

The world is being outsourced! LOL from IT outsourcing to outsourcing your own finances? What’s next outsourcing someone to eat for you? :)

Silicon Valley Blogger October 30, 2008 at 8:36 am

I have many stories about some crazy outsourcing cases…. Yes, there are many strange things that get outsourced. Stay tuned for a post about the unusual ways people outsource their requirements!

Jeff @ Minding My Own Business December 6, 2008 at 7:46 am

Great post. I’m fully on board with outsourcing the many tedious tasks associated with being the Money Handler. My approach to outsourcing my money management and personal finances is more along the lines of automating the associated tasks rather than completely giving them to another.

I like your approach and give you credit for truly outsourcing these elements.

Keep up the great work.
Jeff

Janis Mae February 15, 2009 at 7:29 am

Sometimes when you don’t have much time to do it yourself, its better to outsource them. Just make sure to do all those things that Jeff have mentioned before getting a company or worker to do the job for you.

HaveFunNotStuff March 5, 2009 at 1:39 pm

I’m really good at handling money, but I hate working in a corporate/company environment. Would people really pay me to make their personal budgets, balance their personal bank accounts and make sure their bills are paid on time? Is there a market for that? Does it pay well?

WP Bonds July 30, 2010 at 1:36 pm

I do most of my own finances (poorly, usually) and it really isn’t that difficult. What is difficult is trying not to buy all the cool toys I see. I really do need to get a better handle on them though and start budgeting myself a bit better.

Joanie September 2, 2012 at 7:56 am

My statement is this: it may sound crazy but here it is, I am 48 years old married for 28 years, and still cannot handle day to day bills. I can’t seem to pay my utilities on time. I am always one month behind and one month behind on a car payment, and so on, so I live pay check to pay check and it’s awful!! I cannot seem to save ANYTHING!! Because I am always having to pay double in a month what I should be paying once a month! It’s so irritating and irrational it is driving me crazy. We have two kids at home still one 24 and one 16. So with groceries, and gas and so on, it’s NOT easy. I do not work just my husband right now. However, I am looking! Thanks

Silicon Valley Blogger September 2, 2012 at 2:00 pm

Best of luck to all of you who are working to change your habits. It’s really all about setting a routine and keeping to it, and the first few weeks to a month may be the most challenging when developing a habit. It also help to find a system that works, whether it be to use a calendar or a scheduler to remind yourself about your finances. Some people I know pay their bills once they receive it, so there is no need for a reminder.

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