I have the opportunity to review client spending patterns regularly, and it’s one of the most important exercises in our client process. Very few of us voluntarily want to discuss spending on a line item by line item basis, but our clients have learned to appreciate the value of this kind of discussion.
Why is it important to look at spending?
At Schulz Wealth, we primarily run personal cash flow statements in order to predict future spending for retirement planning purposes. However, our clients experience many secondary benefits from the process. These valuable discussions include appropriate spending levels, upcoming large expenditures, and how current spending aligns with values.
Regardless of how much money we have to spend, even when nearly unlimited, our values should dictate where our funds are allocated. The challenge is that it is easy to lose sight of where our money is going in our busy day-to-day lives. Also, as we age and move through different life stages, our values can change. If we don’t actively change our spending patterns, we can find ourselves spending on things that are no longer as important.
Time to Re-Align
For example, it may make sense to downsize a large family home once the kids are launched. Savings in mortgage interest, taxes, and upkeep may help fund a vacation home, travel, or newfound hobbies. The mini-storage warehouses that continue to pop up everywhere are chocked full of once valuable items no longer needed or wanted. We must be able to tell ourselves it’s “okay” to let go of things that were once important so we may update our spending habits to match what we enjoy today.
Having periodic discussions about spending with a trusted financial advisor can help ensure that your money stays aligned with your current values. Is it time to discuss your spending patterns? Contact me to schedule an appointment today.