Tracking monthly spending has numerous benefits for individuals across all tax brackets. For high-net-worth individuals (HNWI), it is particularly crucial due to their often complex financial portfolios and diverse spending patterns. These complexities can make it challenging to fully understand cash outflows and pinpoint where money is going each month. Without clear insight into their expenditures, managing and preserving wealth becomes more difficult. This highlights just one of the many advantages of consistently tracking monthly spending.
Tracking expenditures for HNWI has 5 main advantages:
- Leads to more mindful spending.
Access to monthly spending data provides a clear picture of spending habits, including both regular and irregular expenses. This information helps to identify areas where expenses can be reduced or streamlined, ultimately leading to better financial management.
- Identifies problem areas and where there might be overspending.
Tracking monthly spending provides a comprehensive view of one’s finances, making it easier to create an accurate budget. This can help high-net-worth individuals allocate their funds effectively and avoid overspending in one area while underfunding in another.
- Assists with better planning for major expenses.
High-net-worth individuals often have significant expenses like buying a vacation home, a yacht, artwork, or other high-value items. Tracking monthly spending can provide the information needed to plan for these major expenses, helping to ensure that there are enough funds available when the time comes.
- Provides increased awareness of investment opportunities.
By tracking monthly spending, high-net-worth individuals can identify areas where they have excess funds. This excess can then be invested in various opportunities that can lead to financial growth and stability.
- Improves cash flow management.
By keeping track of monthly spending, high-net-worth individuals can ensure that their cash flow remains positive. This helps them to avoid being caught in financial difficulties and maintain their wealth.
Best Way to Track Monthly Spending
There are clear benefits to tracking monthly spending. But what is the best way to do so? For high-net-worth individuals, we recommend outsourcing this task to experts (like us).
Why? That’s easy – it’s because we are solely focused on providing outsourced bill pay and accounting services to high-net-worth individuals and families. We’ve been dedicated to supporting these clients for decades, and we have a depth and breadth of knowledge that makes us true experts.
Plumb’s Outsourced Bill Pay Services
Outsourced bill pay service providers like Plumb offer monthly reconciliations to keep track of all transactions. Additionally, we provide easily accessible reporting to highlight the current state and future projections of cash outflow.
Plumb has also developed a proprietary bill pay app specifically designed for our clients and their financial advisors. This app streamlines the entire bill pay process and makes approving bills, viewing bill payment status, and communicating with the Plumb team easier than ever. It provides the clarity we know these clients need as well as access from anywhere, at any time we know they want.
Plumb’s Proven Process
At Plumb, we have a proven process in place for assisting our high-net-worth clients track their monthly spending:
Goal Tracking
- We provide quantifiable information to help them meet the goals they’ve established.
Software Tool Assessment
- We also make recommendations about the best software for them to utilize. For example, clients with multiple entities are best served by a software suite like Sage Intacct, whereas clients with more straightforward finances can use a platform like QuickBooks Online. Both are excellent tools, both can help to streamline reporting and create efficiencies, but it ultimately comes down to the clients’ specific needs.
Customized Reporting
- When it comes to reporting, Plumb offers fully customizable reports. We provide P&L’s, expense tracking reports, cash flow statements, income statements, balance sheets, and more robust investment tracking reports offered by our Family Office Accounting team.
Supportive Services
- We work in partnership with the wealth advisors of our clients, as well as directly with the client – whatever they prefer. Our goal is to make sure we are providing our clients with everything they want and need in their expense tracking.
Tracking monthly spending is a crucial aspect of personal finance, especially for high-net-worth individuals. With a considerable amount of wealth, monitoring how money is being spent is essential to making sure that they are on the right path towards realizing their goals and long-term wealth preservation. Outsourced bill pay and accounting service providers like Plumb are here to help ensure they have clarity into their daily finances so they can go out and enjoy what matters most to them.