Business budget for client?

Question

I am an accountant and i have a client who i need to budget however how do you budget a spendaholic? is it fair to budget him to where he is taken down to 50% of his spending right away?

Answer 1

I would make the change more gradual or he may become angry.
Reduce him down 25% for the first 6 months, or so.

Answer 2

Of course, budgets are a necessary evil. They're the only practical way to get a grip on your spending to make sure money is being used the way a person wants it to be used:
* Identify how client spends money now
* Evaluate current spending and set goals that take into account financial objectives
* Track spending to make sure it stays within those guidelines.

Spending beyond limits is dangerous and if a person does, they have plenty of company. Government figures show that many households with total income of $50,000 or less are spending more than they bring in. This doesn't make someone an automatic candidate for bankruptcy -- but it's definitely a sign of need to make some serious spending cuts. Being wary of luxuries dressed up as necessities shows that if income doesn't cover costs, then some spending is probably for luxuries -- even when considering them to be filling a real need.

I aim to spend no more than 90 percent of income. That way, there's the other 10 percent left to save for big-picture items; nor do I count on windfalls. When projecting the amount of money to live on, I don't include dollars that I can't be sure to receive, such as year-end bonuses, tax refunds, or investment gains. Also, teach your client to beware of spending creep. As annual income climbs from raises, promotions, and smart investing, don't start spending for luxuries until being sure of staying ahead of inflation. It's better to use those income increases as an excuse to save more.

Answer 3

With people like this you need to bring them down slowly from their spending. Trying to do it all at once is not going to get you anywhere. You will end up butting heads with them and it is more headaches than it is worth. Get them to cut their spending by ten percent and when they are used to that then cut it another ten percent until they are where you want them to be. Good luck.

Answer 4

I would budget him down to essentials only, then make him ask for discretionary spending money and give him rewards for thriftyness.

Answer 5

If you ARE an accountant you shouldn't be discussing any of your clients on here.....!!!