But We Don’t Spend That Much: When Client Spending and Planning Assumptions Don’t Match

Clients’ estimates of what they spend do not always align with observed cash outflows, and the difference cannot always be resolved by simply choosing one number over the other. Recurring “one-time” expenses, irregular purchases, lifestyle patterns, and intended future changes require planner judgment. This course teaches planners to evaluate conflicting spending evidence and construct a defensible spending assumption for use in financial planning.

By the end of this course, you will be better prepared to:

• Classify spending patterns as recurring, irregular, exceptional, or potentially characteristic based on available financial evidence.

• Analyze differences between client-reported spending and observed spending behavior to determine which information should inform the planning assumption.

• Construct and document a defensible spending assumption from incomplete, inconsistent, or ambiguous spending information.