Question: I'm getting control of my credit and have paid off most of my credit cards. But I just can't keep to a budget. I need someone to take over my finances for me. Is there such a thing as a money manager who will pay my bills for me?
Answer: You can, indeed, sign up for such a service. Or you can grow up a little.
Managing our own finances is one of the responsibilities of being an adult. It's not always easy, but doing it is empowering.
By creating a budget, you're thinking about your financial goals and what's most important to you. By monitoring your spending -- "keeping to a budget" in your words -- you ensure that you're making progress toward those goals and not wasting money on stuff that's not important.
The fact that you've been able to pay off credit card debt shows you have some discipline. What you may need is a better tracking system.
Personal finance software such as Quicken or Money can automate much of the process, allowing you to download and analyze your transactions without having to input a lot of data.
Or you can try the old-fashioned route: labeled envelopes. Figure out how much you can spend in each budget category each month, put the cash in the appropriate envelope and stop spending when the money's gone.
If you really can't pull this off, then talk to an accountant or check out the AllPaid service available from MyVesta at www.myvesta.org. This credit counseling service will pay your bills and give you an allowance, just like your parents used to do. It'll cost you, though: You'll pay $295 to set up the service plus a monthly fee that averages about $150.
Be Careful With
That 401(k) Money
Q: I'm supposed to get a portion of my ex-husband's 401(k) as part of our divorce settlement. If I use some of it now to pay bills, can I put the money back within a certain time limit and not have to pay taxes on it?
A: Once the money comes out of a 401(k), you have 60 days to invest it in an individual retirement account or you'll owe not just taxes but penalties. What's more, the 401(k) administrator will withhold 20% of the check to cover federal taxes, meaning that you'll have to come up with that much extra money if you want to reinvest the cash in an IRA.
The much better course is to have the 401(k) administrator transfer the money directly to an IRA. That way, you don't have to worry about the withholding and coming up with the extra 20% in cash.
Women already are behind the eight ball when it comes to retirement planning, which is why they need to be particularly careful not to blow the savings they have.
Most women are paid less than men. They have more career interruptions and have fewer opportunities to set aside tax-deferred money for the future. Age 65 will be here sooner than you'd like, so you might as well be as prepared as possible.
Plenty of Fee-Only
Q: You have often advised going to a fee-only advisor. A tax preparer friend told me there is no such thing -- no one could make a living that way. The phone book is no help. It lists lots of investment services, but there's no way to tell how they get paid.
A: Your friend is quite wrong. The fee-only financial planning movement has been gaining steam for two decades and many practitioners have gotten wealthy right along with their clients. In fact, one of the biggest problems with fee-only planning is that its practitioners often are so successful that they've limited their businesses to wealthy clients only.
There are still fee-only planners who cater to middle-income folks, however. The best of the lot are members of the National Assn. of Personal Financial Advisors, which offers referrals at www.napfa.org or by calling (888) FEE-ONLY. NAPFA members are compensated only by fees paid by their clients, and they do not accept commissions of any kind.
Liz Pulliam Weston is a contributor to The Times, a columnist for MSN Money and a graduate of the personal financial planning certificate program at UC Irvine. Questions can be sent to askliz firstname.lastname@example.org or mailed to her in care of Money Talk, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012. She regrets that she cannot respond personally to queries.