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Why – and How – to Track Monthly Spending for High-Net-Worth Individuals

There are many benefits to tracking monthly spending, regardless of your tax bracket. However, staying on top of monthly spending for high-net-worth individuals is especially important because they often have complex financial portfolios and spending patterns — which can lead to difficulties in understanding cash outflow, and where money is really going each month. Without clarity into how their money is being spent, it is more difficult to manage and preserve their wealth.

And that’s just one example of the benefits of tracking monthly spending.

Tracking expenditures for high-net-worth individuals has five main advantages:

  1. 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.

  1. 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.

  1. Assists with better planning for major expenses.

Or, put another way – helps to create a better, more accurate budget for future spending. 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.

  1. 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.

  1. 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.

There are clear benefits to tracking monthly spending. But what is the best way to do so?

There are a few different ways that people can track their monthly spending, but 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.

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.

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.

Take the First Step

Request a consultation to learn how Plumb Bill Pay customizable service offerings can help you save time, gain clarity and remain in control.