STEP 1: Desktop
-Open Spotify Desktop App (make sure it is connected to same network as iPhone)
-Click [Down arrow icon] in the top-right and select Settings.
-Scroll to "Local Files" and switch "Show Local Files" on.
Click "ADD A SOURCE" to select another folder.
-Go to "Playlists" and press "Local Files".
-Press CTRL+A and right-click on selection then press "Add to new playlist".
-(OPTIONAL) Rename playlist
STEP 2: iPhone
-Go to Spotify ios app.
-Go to Settings, then press Local Files. Toggle "Local audio files" on.
-Press "Allow Spotify" to connect to devices on network (if this doesn't pop up, make sure to enable notifications). Alternatively you can go to your iPhone settings and under Spotify toggle on "Local network" access.
-Go back to Settings, then press "Playback". Deselect "Hide Unplayable Songs".
-Go to the playlist with your local audio files. Press the [Download icon] and wait for it to turn green.
~Finished!~