7 Steps To Fix Your Overspending Problem

If you’ve found yourself with an overspending problem, you’re not alone.  Many Americans find that they are spending more than they bring in.  This might be a long-term or short-term problem.  Either way it really doesn’t make a difference.  The fact is that you must address your overspending.  Thankfully, it can be done.  Here are seven tips to get started.

overspending frustrated
Don’t let overspending problems get the best of you.

Calculate Your Overspending Amount

You will quickly be able to tell that you have an overspending problem.  If the money in your account declines month over month, you’re in the red zone.

The first step you need to take is to calculate how much you are overspending.  Add up what you are spending and what you’re bringing in.  Calculate the difference, and that’s your overspending amount.  That is the first amount tha you need to target.

Cut Spending

If you’re overspending, you might think that this could be addressed in one of two ways.

  • Cut spending.
  • Make more money.

When you’re bringing in less than you’re sending out, the quickest way is to cut spending.  Over the long term you can look at ways to make more money.  But, in the short term you need to make quick actions.  These will come from spending cuts.

You need to look at areas that can easily be cut.  Go out less, or not at all. Cut back on your alcohol intake.  Reduce or eliminate your streaming services.  Make coffee instead of buying it.

Whatever it is that’s causing your overspending, target fast fixes that can quickly close the gap.

Prioritize Debt

If you find that your overspending habits have created debt, now is the time to act.  If you’ve accumulated credit card debt, for example, list it out and start to take action.

One of the first actions you should take is to prioritize your debt.  Look at what you want to pay off first.  Two favored options are to target your smallest debt or that with the highest interest rate.  Both have their advantages.

Pick a strategy and start to focus on lowering your debt.

Set Milestones and Targets

If you’re overspending, you want to fix this fast and start working the other way.  Set milestones of when you want these things to happen.  For example, you could target a month or two to break even.  You could then set a goal to be paying your debts down by $250 per month within three months, and $500 per month after that.

Setting targets will give you measurable goals to work towards.

Use Tools

There are a lot of tools out there that can help you track your progress.  I’m old fashioned and prefer a plain old Excel spreadsheet for all my money calculations.  If this works for you, set up a tracking system.

There are also lots of different websites and apps that can help. Find something that works for you and that you’re happy using.

Tip: Don’t spend too much time figuring out your tools right off the bat.  As mentioned above, you need to act quickly, so start off simple if you must.  Circle back later to add tools if it will take more than a couple of days to set up and get used to.

Execute Your Plan

Now that you’ve figured out where you are and where you want to be, the key is to act.  Do the things you’ve targeted, and keep track of how you’re doing.  Chances are you won’t hit every target to the penny, so keep track.  Make adjustments to your plan as necessary.  But, keep your target in sight, and track how you’re doing to get there.

Plan So Overspending Doesn’t Happen Again

Once you get your overspending problem under control, you need to make sure that you don’t fall into the same trap again.  If you fix the problem, and then go right back into it, you’ll have accomplished nothing.  Avoid this.

Start planning on how you’ll stay out of the overspending cycle again.  Some ideas are to save for big expenses, or plan for expensive times of the year by saving regularly. Make sure to have an emergency fund.  Put money into savings before you allocate your spending.  All of these things, once the time is right, will help keep overspending at bay.

Readers, have you ever fallen into the trap of overspending?  What was your a-ha moment?  How did you work your way out?  Let me know your experiences in the comments below, as well as any other ideas you have.  Thanks for reading!

4 thoughts on “7 Steps To Fix Your Overspending Problem”

  1. Right after we got out of credit card debt — which, to be fair, was mainly from student loans and medical debt — and I’d found a job I could work full-time, we went a little crazy with spending. We ended up going back into debt very briefly (about a month) because we were hit with some vet bills for our new cat. That was a wakeup call. We got our spending back under control. It was just a matter of cutting down on hobby spending and nixing any new clothes for a while. And of course the cat’s health improving helped substantially. Still, a lot of it was bad behavior on our end, so we just had to rein ourselves in.

  2. Hi – Drew from Weekly. I think one of the thing that throws people off is that there are too many budget categories. People get lost in “where they are” in a month.

    If you think about it, you only really need two categories of expenses: recurring and day-to-day. Subtract your monthly recurring expenses from your monthly income and then that is your monthly amount you can spend Divide that by 4.3 and you have the amount you can spend freely any given week.

    Breaking up your discretionary spending down on a weekly basis makes it easier to keep track of how much you have to spend and relieves the guilt because you will always know what you can spend. You can use a spreadsheet to keep track but we beta testing an app to make it easier at weeklybudgeting.com. If interested in Beta testing, its free!

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