America has an epidemic of overspending. Among the evidence supporting this conclusion is a 2005 study, published on the US Department of Labor website, of the retirement savings behavior of baby boomers. The study found that 56 percent of baby boomers live hand to mouth, at best: 19 percent indicated they spend more than their income and 37 percent spend every penny they receive. Money trouble is the number-one cause of male spousal suicide and the number-one stressor of Americans.
How do we reverse this trend? It’s not easy. How do you get someone who is overweight to begin an exercise program and modify their diet? Give them a book? Or more information? Keep reminding them that obesity kills? We all know none of that works. Telling an overspender to get on a budget or quit overspending doesn’t work, either. The roots of overspending, just like the causes of overeating, go much deeper. Change requires far more effort than just “getting on a budget.”
Financial planners are trained to help people who can save money, who have an inherent ability to pay themselves first and live on the rest. Most planners run from anyone who is an overspender. I know in the past 
I didn’t have any tools to help someone who could not save money.
In the past three years, in conjunction with my work and writing with Drs. Ted and Brad Klontz, I’ve discovered some methodologies that can turn overspenders into savers. Here are some guidelines I’ve learned:
1. Have a support system in place, to include a financial mentor, financial therapist, a professional bookkeeper, and one other person (not your spouse) whom you agree to be accountable to. The mentor needs to be someone who models the behavior you are working toward—who is able to successfully pay taxes, fund a retirement plan, save and spend no more than his or her income. The therapist needs to be someone who has done his or her own therapy around money.
2. Understand that, for many people, curing a chronic overspending problem is rarely about money. It typically has everything to do with deeper unresolved emotional issues.
3. Be willing to do the deep emotional work needed to change your destructive financial behaviors.
4. Learn about mindfulness meditation and commit to setting aside five minutes every day for meditation practice.
5. Hire a professional bookkeeper who will set up your books and determine your historical spending for the past 12 months.
6. Establish two bank accounts, one for discretionary spending and one—which you cannot access—for paying bills.
7. Empower your bookkeeper or financial mentor to control the bill-paying account.
8. Cut up all credit cards and terminate any further sources of credit, such as home equity lines.
9. Work with your bookkeeper and support team to develop a printed spending plan, month by month, for the next 12 months.
10. Print a monthly report comparing your spending to your spending plan and share that individually with each member of your support team.
11. Take time to clarify your values, define what you really aspire to have and to be in your life, and set goals to help you achieve your aspirations.
12. Before you make any purchase, ask yourself whether it will serve to fulfill your life goals.
I’ve discussed the first component of this approach, healing the emotional issues that keep you financially stuck, in previous columns and in my two co-authored books, Conscious Finance and The Financial Wisdom of Ebenezer Scrooge. I’ll have more information about the second component, developing a structured plan and support system, in next week’s column.
