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Piershale: You can’t save what you don’t have

Published: Sunday, Feb. 9, 2014 5:00 a.m. CDT

Whether you’re retired or working, do you really know where you spend your money? These are increasingly important questions today as more people are helping not only their children, but also their grandchildren. This also may be at the expense of their own retirement. Having a financial plan can help guide your decisions now and in the years to come.

Ongoing tracking of your expenses, like stepping on the scale, provides a reality check. The more we consciously focus on our spending, the more likely we will not overspend. Like exercising or dieting, we know it’s good for us, but it can be hard to do consistently.

Not all planners agree that tracking expenses in general is enough. Many people who are asked to track all their expenses discover their estimate of money left for saving or investing is frequently off because they exclude unusual expenditures and average the balance. The focus of some financial plans is on having individuals set up automatic bill-pay and meet specific savings goals through monthly automatic deposits. The budgeting then usually falls in line accordingly.

Today, a growing number of largely free online tools are available to help you track your expenses. Companies such as and Yodlee MoneyCenter can import and aggregate data from your credit card, bank, and brokerage accounts. They break down your spending into categories, such as dining and vacation. Some programs can even track specific items, such as how much you spend on coffee. However, these online tools only provide a fraction of the guidance an adviser can give you. So, incorporating both into your overall financial plan may be the most beneficial. Once you know where your money is going, identifying cuts that can make a real difference becomes easier.

You may want to consider having a monthly meeting with your spouse. If you are not married, a trusted confidant is an option. This meeting should include reviewing where you have been spending money and anticipated expenditures, both short- and long-term. It could lead to some very interesting conversations. Having both parties involved, discussing goals and objectives, where you are today and where you want to be in the future, can be helpful.

One of the most important things you can do is save money. A key to success is the ability to delay gratification. Saving is crucial to developing that ability and imperative for anyone who wants to acquire and grow wealth.

• Mike Piershale is president of Piershale Financial Group. Send any financial questions to Piershale Financial Group Inc., 407 Congress Parkway, Crystal Lake, IL 60014. Fax them to 815-455-6895 or email them to

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