Cash flow is the financial lifeblood of the household. As no matter how effectively one plans for the future, with savvy tax strategies and well-diversified investment portfolios… if there’s more cash leaving the household than there is coming in every month, eventually the plan (and the money) will run out.
Unfortunately, though, remarkably few individuals have a clear understanding of where their cash is actually going from week to week and month to month throughout the year. At best, most households are aware if their available cash balance (e.g., the bank account) is rising or falling… but without knowing where exactly the money is going, there’s no way to make adjustments. Yet in practice, tracking spending to figure out where the cash is going can be so time-consuming and laborious that many households would rather stay in the dark than take the time to do the extra work.
The good news, though, is that technology tools – when combined with the ongoing shift towards “cashless” digital transactions – is making it easier than ever to track a household’s cash flow. In this guest post, Lindsay Bourkoff, Director of Financial Planning at Shrier Wealth Management, highlights the software tool that she’s found works best in planning with clients: Tiller Money.
Discovered in her process of trying to find a cash flow tracking tool for her own household, Lindsay shares how Tiller Money finds a balance between automating the download of transaction data, easy viewing and output by aggregating the data into a custom Google Sheet (rather than a proprietary software app that cannot be adapted for individual client needs), and categorization (which can be done semi-automatically, though Lindsay notes that, in practice, having clients play at least a small role in manually categorizing irregular expenses can actually help to put them in better touch with where their money is really going).
Ultimately, some advisors (and their clients) may prefer a more automated solution to fully track and categorize expenses, while others may prefer an entirely hands-on approach. But in a world where there are still remarkably few cash flow tracking and budgeting tools for financial advisors themselves, Tiller Money provides an interesting consumer-based alternative (that can still be easily adapted for financial advisors in our own practice with clients).
source https://www.kitces.com/blog/tiller-money-review-cash-flow-budget-tracking-sheet-financial-advisors/
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