How To Stop Overspending

One of the concepts discussed in our online life coach training program is what we like to call over-responding. Not to be confused with over-reacting, the phenomenon where someone produces an excessively dramatic or emotional response when it isn’t necessary, and instead refers to the careful evaluation of the situation to produce several solutions.

When you say that something “bad” happened to you, it is usually yourself that defines what is bad rather than the event. Due to “bad” being subjective, it’s important to look at the bigger picture and follow the decisions or events that lead to something “bad” happening in your life. For example, was there something you said or action you performed that resulted to this bad event? Ask yourself, “how can I prevent this from happening in the future?” It may likely be that there was no avoiding this event and that is perfectly acceptable. However, people often react or look to others to blame instead of responding, and while they may respond to the event, usually they do not over-respond.

Most people experience a point in their lives when they review their bank statements and discover that they are overspending, spending more money than they needed to or spending more than they had. An overreaction may be getting upset and blaming your spouse. Accusing them of spending their money on useless purchases is an example of a reaction. A respond may be a proposal that from now on you will both consult each other before making larger purchases and avoid spending money on unnecessary items or services.

Over-responding would be joining your spouse in the creation of an action plan to address the matter and to prevent overspending in the future. An action plan may look something like this:

  1. Hire a bookkeeper – They will review each of your receipts, credit card and check transactions in the past six months or so to determine where specifically your money is going. Creating individual categories provides an organized approach to your spending instead of lumping all your purchases under something like “Other.” They may help you maintain accurate and detailed financial records for the future.
  2. Review the financial report – You’ll see where your money is going which will allow you to decide on an area of your spending that can be reduced without lowering your quality of life.
  3. Regularly meet to talk about your spending habits and consult each other before making large purchases.
  4. Agree on a month-long hold on all large purchases to prevent impulse spending.
  5. Set aside some freedom money – Allow each partner to have some money to spend on whatever they want that does not need to be reviewed or accounted for by the other partner. This provides a sense of freedom where each partner can spend their money without going over the budget or feeling guilty afterward.
  6. Request extended overdraft protection from your bank.
  7. Consider a loan – If you’re looking to remodel the house, it is probably best to get a loan instead of using your budget on furniture.
  8. Discuss alternative ways to increase overall income.
  9. Head to the library to search online to find books and articles on couple spending to learn other ideas on how to improve your financial situation.

From now on make a genuine attempt to over-respond to the problem you are facing in life, don’t just respond or react. Begin looking at how you can fix the situation or make efforts to reduce the problem. This means that you should not simply address the symptoms, take some time to find the source of the problem; overspending may be the result of dissatisfaction in your personal and emotional needs, look to address the underlying cause rather than the immediate symptoms.