3 Steps To Knock Down Overspending

By: Michelle Bogle

What starts as a slow burn can erupt into a bigger issue that has the potential to extinguish relationships, cause bankruptcy and impair your ability to live the life you work so hard for.

Overspending — it’s a topic that people don’t like to talk about but one that many can relate to. It’s a situation that often starts innocently: a few impulse purchases here, a round of brews for your buds there, a new tool for that project you’ve been putting off. Before you know it, you’re in the red having spent more than you can afford — and then some.

Thing is, overspending doesn’t look the same for everyone, but it’s usually clouded in a thick layer of guilt. You might find yourself lying to your spouse about how much you spent or where the grocery money has gone. Maybe your credit card debt is growing or you can’t even begin to guess how much you spend on necessities. What starts as a slow burn can erupt into a bigger issue that has the potential to extinguish relationships, cause bankruptcy and impair your ability to live the life you work so hard for.

Need to regain control? Here are three steps that you can take right now to curb your overspending:

1. Get real about it 

It might sound cliché but talking about your overspending will relieve that pent-up pressure you feel. If you are in a relationship, tell your partner what’s going on and be honest. If you’ve been reckless with household finances, own up to it, apologize for your actions and create a plan to make it right. You should also reach out to someone you trust for support and accountability. When you talk openly about your spending troubles, you’ll start understanding why you do the things you do so you can move forward.

2. Write it down 

Part of the problem with overspending is that there’s a disconnect between knowing what you bring in (your income) and what goes out (your expenses). Sure, you might make a stable firefighter salary or generate extra money from a side gig, but taxes and payroll deductions eat a significant portion of your earnings. By tracking your take-home income and subsequent spending, you become accountable. And you don’t need fancy software either — just grab a pen and paper and do the work. Not only will you get a clearer picture of how much you actually make but you’ll also see where your money is going. You might just find yourself making better choices, like not buying that new truck you can’t afford right now.

3. Plan for big purchases

You wouldn’t extinguish a structure fire without a plan of attack. The same is true about major purchases. If you’re wanting that new truck, a pool for your kids or some other big-ticket item, you can have them but you need to plan. Think of it this way — each dollar you earn has a job. Some cover your fixed and variable expenses, while others are allocated for debt repayment, investing or saving. As you track your spending and find unassigned dollars, put those funds towards your savings goals so you can spend your money guilt-free.

It might take time to live within your means and you’ll probably slip up along the way but with some dedication and self-awareness, you can curb your overspending by being real about your finances and choices.