In this week's Arista Advice, Paul L. Moffat of Arista Wealth Management provides you with the top three tips on how to improve your cash management on all levels on the economic scale.
The question of the week is - Paul, we have a money problem.
I recently sat down with a client, dear friends and have known them for years, wonderful people. They have a wonderful family.
As we started talking about money with them, we discovered and peeled back the onion of money and found out they're spending $1,500 a month for a country club membership. On a yearly basis, they've been spending about $18,000 a year. Times that by four. They've spent, in the last four years, around $72,000 for this country club membership. As we discussed, and as we talked about this monthly expenditure, we soon found out that neither of them were using it, but that another family member was using it, and they were letting them use that because they love that other family member. Noble, worthwhile cause, but is there another way to show your family member that you love them than by spending $1,500 a month? There certainly is.
Cash management is a real issue that we see with clients on all levels of the economic global scale. The most important thing to do is to talk about money. Second thing to create budget and expenditures. Number three don't overlook a few dollars.
In this case $1,500 a month times 12 was $18,000 a year, going back the last four years it was $72,000. You take that $72,000 and forecast it forward, it is in excess of $250,000, the total cost of that monthly expenditure.
Now I am not a party squelcher, and I'm not a do-good killer. I am all about having good times and doing great things, but let's have a conversation with our spouses, with our significant others, with our children, with our grandchildren, and with others about managing and handling money with great care.
Hope you’re well. Have a great week, and we look forward to talk to you soon.