Why We Over Spend
I had a Doctor and his wife come to see me one time to talk about their spending problem. He looked at me and said that they made plenty of money and they were always scraping by at the end of the month.
I told them to go back and track where they are spending their money for the next three months.
Three months later they arrived at the office looking a little dejected. He said, “I am so embarrassed. We spend $2,500 a month eating out”. I told him that was great news. He looked at me a little puzzled and asked why I would say such a thing.
I told them that where we spend our money is what we value. Just take a look at your spending because your money flows to your heart. If you want to know what you value the most, add up your spending and separate them by percentages. The highest percentages by category represent your highest values.
It is not right or wrong that they were spending so much money eating out. Your values are your values. The problem was that their priorities of their values were in conflict. Sure they value eating out. They were upset because they came to the realization that there were other things that were more important and needed to be prioritized. Eating out needed to be moved down the list of what they valued.
The first place to start in creating any effective spending plan is understanding what are the most important values of you and your spouse as a family. Then make sure the money is being allocated and spent in that order. It is the best way to get your spending under control. Finally, check it each month and make sure that you are being true to your values and not just going through the motions. You might find that what you think you value the most is still in the wrong order.