How Hiring an Accountant For Personal Finances Can Help You

Published on October 18, 2017

Have you ever spent a day out of the house only to return and wonder where all your cash from your wallet or purse went? Our spending habits have evolved and changed over the years. The first universal credit card, which could be used at a variety of establishments, was introduced by the Diners’ Club, Inc. in 1950 and this dramatically changed the way people spend money.

Now you can spend money without actually passing money over and the use of ‘plastic’ means there is less ’emotional’ connection to money.

So What is Personal Finance?

Personal finance refers to anything you spend outside of business. This can be your mortgage, personal loans, credit cards, utility bills, travel and holidays, clothes and eating out. Everyone will have their habits, spending patterns and ‘justifications’ on what to spend their hard-earned money on.

Financial decisions you make will always have an impact on those around you. Some may be small and others much bigger, but typically, personal finances can affect everyone.

Financial decisions you make will always have an impact on those around you. Click To Tweet

Billionaire families work hard to protect their money, and recent reports show that by the time the money reaches the third generation, there is a great risk of losing it all. This is an interesting thought to non-billionaires, as the concept of losing or spending billions might seem impossible, but it happens even to the richest of families.

So What Type of Spender Are You?

We can split these into general categories:

Neglectful – Brushing the issue under the table, forgetting about the problem until it’s too late. Many people fall into this category. It’s not always a conscious neglect, sometimes people can be so busy that the accounts are ignored and suddenly forceful reminders are sent – or they apply for a new mortgage only to realise their credit history has been affected by late credit card payments.

This neglect can have a knock-on effect for the whole family and can be destructive.

Impulsive –  With the use of credit cards and ‘plastic’, this increases the chances of impulse buying. It’s often a certain type of person who likes to do this, they’ve popped out for a sandwich and ended up buying a car, they ran down to the shops for some milk and ended up with a new pair of shoes.

This impulse is a fun and exciting way to spend your money, but it can end up becoming a form of neglect, with rash decisions not being thought out, or consideration for what the personal finances can actually afford.

High Earner – With high income comes a higher responsibility. It isn’t called the golden handcuffs without good reason, and it’s typically found in city/stockbrokers who get a high income very quickly. They purchase the new house, luxury car and take part in luxury holidays.

Now life comes with many more expenses and admin, and whilst they may be able to afford to pay the bills, they might not have a system in place to manage the admin or bills.

Big Spender – This person doesn’t always have the income to support the spending habits, but they like to spend big! They typically live beyond their means, borrowing money and financing options they can’t afford.

In this day and age, it’s commonplace to borrow money to buy a house or car, but once you start to borrow money for the latest iPhone, luxury holiday, or blow thousands of pounds on a night out, you have to begin to take stock of how you are a big spender.

So How Can Hiring an Accountant For Personal Finances Help You?

Accountants come in many forms. Some are chartered, registered accountants working as solo or part of small or larger companies. Some are huge firms. Others might be found in the form of a personal assistant or executive assistant with specific qualifications and skills. By hiring an accountant for personal finances, they can help in all manner of areas including:

  • Personal finances and admin
  • Advice and guidance on financial decisions
  • Helping you save and invest your money
  • Negotiation of salary/money discussions
  • Pension Planning
  • School Fee Planning

How Can Hiring an Accountant For Personal Finances Help With the Specific Spending Habits You Have?

Neglectful Spenders – The accountant or PA will be able to ensure you never forget to pay bills, ensuring you are never overdue or face penalties. They can send you a personal reminder or just pay the bills on your behalf – making life easy and simple.

Impulsive – The accountant or PA will be able to set your daily, weekly budgets and make sure you are clear on what you can spend on impulsive purchases. This way you can still spend the money whenever you like, but it will ensure you don’t run up debt or spend on items which might not be required. They can also help you re-sell or take the item back if you no longer want it!

High Earners – Simply put, the accountant or PA can take complete management of your properties, finance and spending habits to ensure that you don’t have to worry about the extra admin or burden on your time. You can entrust all the correct financial decisions to be managed correctly, including personal tax returns and corporation tax returns, should the PA or accountant help with your business life also.

Big Spender – The accountant or PA can help demonstrate how by spending the big bucks has affected other parts of your personal finance. For example, if one night out has cost £2,000, the PA can show that this month, this money needs to be deducted from another area. This will also help the big spender become more aware of how they are spending their money. They can help them consolidate their debt and work towards paying off the finance and loans if this is important to the person.

Hiring an Accountant for Personal Finances: How Much Does it Cost?

The cost of hiring an accountant for personal finances will vary from country to country, but these are the general guidelines to help with your budget and search:

1. Sole Trader Accountant – These will typically be the most cost-effective way of doing accounts and financial support. Look to pay between £50-100 a month

2. Company Accountant – Working with an accountancy firm gives you the support of a number of staff, and it likely means if your accountant is on holiday or ill you can still get advice when needed. Expect to pay between £100-300 a month depending on the size and quality of the firm.

3. Large-scale Accountant – Working with a big firm is more suited to bigger corporations and higher spenders. Expect to pay upwards of £300/400 a month.

4. Private Personal Assistant – Depending on the qualifications you need them to have (from chartered accountants through to bookkeeping etc) will affect the amount you will pay them, but for full-time salaries, expect to pay between £28K-80K a year. For part-time salaries, this would be calculated on a pro-rata arrangement.

5. Family Office – Should your accounts and finances be in the millions or billions, it is most suitable to look to have a personal family office which is a collection of staff working on your finances. This is the key way to ensure your finances and personal management is protected to the highest level. Depending on the location of the office and amount of staff will mean that the salaries paid to each staff member will vary considerably.

Why Me?

It’s easy to shy away from hiring an accountant for personal finances or a personal assistant if you don’t feel you need one. But regardless of your spending habits (or indeed your ego!), many people can benefit from the additional support and guidance a professional service can give you. If you need our support in hiring an accountant for personal finances, be it recruiting or being connected with the right accountant or personal assistant to suit your needs, please don’t hesitate to get in touch.

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