<p>The need for effective management of scarce finances has assumed centre stage in the development discourse at the municipal level in developing countries. This hinges not only on the need to maximise revenue collection, but also on the necessity of managing municipal finances in ways that are effective, efficient, and sustainable. The paper discusses municipal financial challenges and management practices, focusing on selected municipalities in Ghana within a developing-country context. The study used a qualitative approach to data collection and a descriptive design for analysis. Using rational choice theory, the paper discussed municipal financial challenges and the financial management practices adopted to address them. The findings suggest intriguing, but mostly unsustainable, municipal financial management practices. This includes the ineffectiveness of those practices for dealing with long-term financial challenges and their implications for local development. Some of the measures adopted more often to address financial challenges in the municipalities include budget cuts, budget revisions, and the prioritisation of projects and programmes. The rest are mergers of departmental activities, programme deferment, and lastly, personnel reduction or transfers.</p>