Transcript:
In this training, we’re going to be taking a look at expenses.
There’s no hard-and-fast rule about what you should enter in Voyant as a goal versus an expense. However, goals in Voyant are considered trackable expenses. That means they will appear in the Goals section, on the Timeline, and within reports as specific expenses that are tracked separately in the software.
Expenses, on the other hand, are typically everyday expenses within the plan.
For example, in this training, I’m going to enter our clients’ everyday living expenses during their pre-retirement years as a standard expense.
So, I’m going to enter their pre-retirement expenses as $75,000 annually.
Since I’ve already entered their retirement expenses as a retirement goal elsewhere in the plan, I want to make sure I don’t accidentally double-count those expenses during retirement.
To avoid that, I’m going to go into the Timing section and make sure these pre-retirement expenses end at the same time the retirement goal begins. I’ll set the retirement event as the end event for these expenses.
Next, I’m going to use the Save and Add Another option so that I can immediately enter an additional expense.
This next expense is going to represent a car purchase every five years.
We’re estimating this expense to be approximately $25,000, and we’re going to classify it as a Luxury expense.
What that means is that this is considered a lower-priority expense within the plan. If the clients are unable to afford all planned expenses, the software will prioritize basic living expenses first, while luxury expenses would be fulfilled last.
Next, I’m going to move into the Timing section.
I want this expense to occur every five years, so I’m going to change the expense frequency from every one year to every five years.
I also don’t want this expense to begin immediately at the start of the plan. Instead, I want it to begin in the same year as the Family Vacation event. So, I’ll set the Family Vacation as the start event.
Then I want these car purchases to stop at age 75, so I’ll use the “Slowing Down” event as the end event.
So now, between ages 54 and 75, this expense will occur every five years.
I’ll click Done to save the expense.
Next, I’d like to go over to the Let’s See screen to review how this appears within the plan.
You can see that in the year of the Family Vacation, we now have a larger spike in expenses. You’ll also notice a light blue line, which indicates that there are leisure or luxury expenses occurring during that year.
You can also see additional spikes with blue lines every five years after that, reflecting those recurring luxury vehicle purchases.
You’ll notice that those expenses stop occurring after age 75, just as we configured.
If we’d like to see more detail about these expenses, we can also go into Year View, select the Expenses tab, and scroll to any of those years within the plan.
There, we can see exactly which expenses are occurring and what those expenses have inflated to over time.
You can also use the dropdown menu to look at the Expenses Chart. You’ll notice that the different expense categories are represented by different colors, allowing you to clearly identify the types of expenses and the amounts occurring in any given year.
Those expenses will continue to inflate annually based on your plan’s inflation settings.
I hope this was helpful.
Don’t forget that if you have questions while working on a plan, whether it’s a real client plan or a test plan you’re following along with, you can always click the name of your client in the top-right corner, select Request Support, enter your question into the text box, and share client access with our team.
Thanks for listening.