The following blog is by Steve Demaray originally published in his website Personal Money Coach.

Never ask for money spent
Where the spender thinks it went
Nobody was ever meant
To remember or invent
What he did with every cent

I love this little poem by Robert Frost.  Beside the fact that it rolls off the tongue effortlessly, it also speaks a timeless truth.  There’s a false belief that to be more financially responsible means we must account for what we do “with every cent.”  I firmly believe that the mere thought of this has served to turn many away from greater money engagement.

Unfortunately, technology has further encouraged this with software and apps that facilitate the backward looking practice of expense tracking.  Focusing on what we’ve already done has us faced in the wrong direction.  The future’s where it’s at.

I’m all for “knowing our numbers” i.e. what our lives really cost, because in my opinion, most of us don’t.  My business has given me a detailed look into the spending of countless households.  I’ve learned the routine expenses of our lives, like the gas mileage of our cars, don’t change much over time. By routine expenses, I mean our Fixed Obligations (mortgage payments, utilities, child car, etc.)  and Essentials (groceries, gasoline, haircuts, etc.). Years can go by without  these changing much, so devoting time to micro-monitoring them isn’t going to yield much benefit.

” Fixed Obligations” and “Essentials” have four things in common;

(i)  they account for most of where our money goes
(ii) they mostly arise from past decision, for example the houses we live in, the cars we drive and the children we have
(iii) assuming we don’t want to make any changes in these areas (say for example, like sending the kids back) we’re pretty much on the hook for them

While we might not see it this way, how we manage our “future” spending will have much to do with the quality of our lives. Future spending can be divided into two categories, NEEDS and WANTS:

NEEDS:  Retirement, Education Funding, Home & Car Repair, Clothes, Health & Dental Care

WANTS:  Holidays & Vacations, Electronics, Entertainment, Dining Out… and so on.

Here’s an insight; without conscious decision making, NEEDS and WANTS are the things that deplete our savings, get stacked up on our credit cards/lines of credit or go unfunded entirely. They account for much of our spending but little of our planning.  If you want to focus on one area of your finances, make it the future.  I authored my own poem to drive this point home:

Worry not about each spent cent
For a money-life you won’t resent
What’s in your past is gone and dead
And should not reside inside your head
So plan ahead and please be brave
The future holds the things you crave
(With apologies to Robert Frost)

About Steve Demaray: CFP® aka The Personal Money Coach. Steve’s financial service experience spans 29 years including Vice Presidency of a bank.  Concerned that the financial services industry lacked a way to help people gain basic money know-how, Steve left the corporate world in 2002 in search of solutions.   

Initially Steve earned a Certified Financial Planner (CPF) designation and operated as a financial planner. He quickly saw that people perceived financial planning as impersonal and uninspiring. It was through Life Coach training that Steve learned the merit of nurturing personal values, visions, motivation and growth.  By intertwining aspects of financial planning and life coaching Steve has become a pioneer in the emerging field of Money Coaching.

Beyond Money Coaching, Steve advocates for the importance of Money Clarity in our lives as a presenter, speaker and writer/blogger. You can follow him on Facebook and on Twitter @stevedemaray