When I first asked myself, “how do I stop overspending”, I did not realise that answering this question will require so much drilling inside my mind. Why mind? Because overspending is caused more due to psychological limitations than anything else. I hope you agree with my forethought.

If we do not want to spend money, nobody can force us to spend. Similarly if we want to overspend, even external coercion against it, cannot stop us. What does it mean? It means, to stop overspending we must first take our minds into agreement. How to do it?

Data Input

Current Age (Years)Child’s Current Age (years)Have You Purchased Your First Home (Yes/No)
Retirement Age (Years)Fund Required for Child’s Higher Education (in today’s terms) (Rs.)Present Value of Your First Home (Rs.)
Net Income Per Month (Rs.)Fund Required for Child’s Marriage (in today’s terms) (Rs.)After How Many Years you plan to buy Your 2nd Home (Rs.)
Total Monthly Expense (Rs.)Present Value of Your 2nd Home (Rs.)
Current Accumulated Retirement Savings-EPF (Rs.)Self Contribution for 2nd Home (%)
Current Contribution to EPF/month (Rs.)
Reduction of Current Expense to Retire Today(%)
Time Before Retirement (Years)
Future Value of Current Retirement Corpus (Rs.)
Average Self-Contribution Per Month to EPS Till Retirement (Rs.)
EPF Corpus due to Self-Contribution till Retirement (Rs.)
EPF Corpus due to Employers-Contribution till Retirement (Rs.)
Total EPF till Retirement (Rs.)
Cost of Living After Retirement (in todays terms) (Rs.)
Cost of Living After Retirement (Future Value) (Rs.)
Retirement Corpus Required at Time of Retirement (Rs.)
Extra Retirement Corpus to be Built before Retirement (Rs.)
Time in Hand before Child’s Higher Education (years)
Time in Hand before Child’s Marriage (years)
Corpus Requried for Child’s Higher Education (Rs.)
Corpus Requried for Child’s Marriage (Rs.)
Monthly Investment (SIP) for Child’s Higher Edu. Fund (Rs.)
Monthly Investment (SIP) for Child’s Marriage Fund (Rs.)
Present Home’s Future Value (Rs.)
Second Home’s Future Value (Rs.)
Additional Funding Requried for Second Home’s (Rs.)
Self Contribution for Second Home’s (Rs.)
Savings Per Month (Rs.)
Monthly Investment (SIP) for Retirement Fund (Rs.)
Monthly Investment (SIP) for Child Plan (Rs.)
Monthly Investment (SIP) for 2nd Home (Rs.)
Total Additional Monthly Investments (SIP) Necessary (Rs.)

Train your mind…

How do i stop overspending - 2

The most effective way to train our minds to prevent it from overspending, is to make it first realise that it is overspending. How to do it? Example: use the online calculator like provided above. What is this calculator about? It is a simple financial planning calculator, which can be used as a tool to curb ones bad habit of overspending.

We all have overspent on our days of enthusiasm, right? But this is particularly worrying for people who are more impulsive in purchases. But even with such people there is a pattern. Understanding ones “pattern of overspending” will be the key in stopping it.

Everyone has their own typical behaviour when it comes to overspending. Different people tend to overspend on different things. Speaking in general, people mostly overspend on the following:

  • Food,
  • Clothes/Accessories,
  • Gadgets,
  • Automobiles,
  • Real Estate Property,
  • Entertainment, and
  • Vacation.

Why people overspend on these things? Because these things are very tempting. Foodie people are tempted to spend more on foods. Travellers would not mind spending on vacations. Auto freaks will find their logics in buying a BMW instead of a Toyota. Gadget geeks will consider buying any phone less than iphone 10, a mistake.

In a way, the spendings of all these people are justified. But in “monetary terms“, they may be overspending, and hence it is a mistake. How to prevent it? By giving positive affirmations to our mind that, “money consideration is essential before making a purchase”. Ultimately it all boils down to money.

Hence it is essential to train our minds to become sensitive to overspending. So this brings us to an important question…

What is overspending?

How do i stop overspending - 3 Overflow

When people spend more than what they shall actually do, is called overspending. Over-spender’s actually oversteps their boundaries. What is the boundary? Affordability.

Spending beyond ones affordability is called overspending.

How to establish ones affordability? By budgeting. This brings us to the root cause of overspending. Lack of an expense budget. Spending without budget is like driving a car without a speedometer. In this case, the speed control is dependent on ones good or bad judgement.

How to activate ones mental speed control (expense control)? We will discuss here a “practical approach” which is also most effective. Why I say it is most effective? Because it works on the theory of self-realisation.

But before we divulge more details, let’s get an essential basic right at the outset.


Overspending is a subjective thing. What might be an overspending for me, will not be the same for you.

I am not talking about our “passions or likings”. I am intentionally avoiding its discussion because it will not be helpful. Why? Because we often use our likings as an excuse to spend more.

In this article our focus is, how do I stop overspending? First step to prevent oneself from overspending is to know, “why to stop overspending”. The reason is plain and simple.

When overspending stops, there are more savings (extra reserves). More reserves mean, extra cash. This extra cash can be used to take care of “essential priorities” of life. What are the essential priorities? Typical unavoidable priorities of common men are as below:

  1. Retirement Planning.
  2. Child’s Future Planning.
  3. Home for self occupation.

Before we divulge more into the ways to stop overspending, allow me to talk a bit about “essential priorities” of life. It is essential to explain this, as it is the essence of this article.

Essential Priorities…

I personally feel that, if a common man can manage the above 3 priorities, his/her life will be mostly sorted.

I know someone may question that these three (3) priorities are not enough. True, they are not enough. But I am considering ‘only them’ as an assumption, to prove a point. Using this assumption, we have also developed the above financial planning calculator. After reading this article, the readers can use this calculator to further understand my point.

What is the point? We will not overspend if we know that the money is required elsewhere for more essential priorities.

Fixing and quantifying our priorities, will eventually lead us to minimum overspending.

Allow me to give you an example of, how priority quantification can lead to no overspending.

Example: How quantifying priorities is effective…

Listing of the priorities is the first step. Then the next step is to quantify them, and give it a completion date. Why we are doing this? To tell our brain that they (priorities) are important milestones of life.

Interesting is to note, how our brain processes this information? These milestones will start working like a filter. How? This is what I will like to explain this using a simple example. Remember, the takeaway keyword here is the ‘filter’.

Suppose there is a person (Raj, age: 34 years) who earns Rs.200,000 per month as salary. Raj has estimated that his monthly household expenses are close to Rs.85,000 per month. Generally speaking, this is a good take-home package. In India, with this salary-expense balance, one can afford some overspending, right? But in this case Raj will not overspend. Let’s see how.

Raj has quantified the following priorities of his life:

How do i stop overspending - 5 Priorities

So now we have the following data in our hand:

  • Income: Rs.2,00,000
  • Expense: Rs.85,000
  • Priority Cost: Rs.1,10,000

Lets apply these two filters to see a point:

How do i stop overspending - 6 Filter

What we can read from the above infographics? Though Raj is earning a decent income (Rs.200,000) over and above this monthly expenses (Rs.85,000), but still he is not able to overspend a lot. Why?

Because the load of his priorities (Rs.1,10,000) is consuming most of his spare cash. In fact, the spare cash that is left after managing all the priorities is only Rs.5,000.

This is what happens when we try to gauge our spendings in perspective of “priorities”. It helps us to realise, how much money we are making to take care of the “uncompromisable needs” of our life.

But there is something else which makes “priorities listing” so effective. Do you know what? The “hard numbers” (quantifying). How? It helps us to realise our necessity in advance, even before they become due. This realisation will work like an inner voice asking us to stop overspending’s.

Let the inner voice speak…

Generally people do not ignore their inner voice when it is speaking in “hard quantified numbers”.

While we fall prey to our temptations, but when inner voice is speaking loud, no temptation can deter us from our goals.

This article is all about tickling our mind and sensitising its inner voice to speak loud, and start speaking in accordance with our priorities (goals). How to do it?

This can be done by using the online financial planning calculator provided in this article. What it does? It helps us to quantify our priorities.

When I first asked myself, How do I stop overspending, the question led me to the above realisations. I also developed my personal financial planning calculator in excel, which was ultimately converted into an online calculator in later years by the team.

I found this online calculator very useful in quantifying my top 3 priorities of life. It eventually helped me to tone down my impulsive spendings (overspending’s).

So here is the solution to stop overspending:

  • Listing down of priorities.
  • Using the online calculator to quantify the priorities.

In my case, the priorities that I have generalised, are these:

  • Home purchase,
  • Child’s future needs, and
  • Retirement planning.

Now allow me to explain how to use my online financial planning calculator.

[Remember: Why we are using this calculator? To quantify our priorities, which ultimately will lead us to overspend less]

How to use financial planning calculator?

Before we go into the details of using this calculator, let me tell you what questions this calculator will answer.

  1. Savings: What are your current monthly savings?
  2. Retirement: How much to invest each month to build the necessary retirement corpus?
  3. Child: How much to invest each month to build the necessary corpus for the child?
  4. Home: How much EMI needs to be paid each month to buy a home?

Are these question relevant? I am sure, majority of us will relate to these question. If we know the answers to these questions, probably we will never overspend. How?

Suppose a persons savings is Rs.20,000 per month. But to manage his priorities, he will need Rs.35,000 per month. Do you think this person will overspend? No. Why? Because his inner conscious will not allow him to overspend elsewhere. He is aware that, even his existing savings is not enough to manage his priorities.

I hope you are getting my logic. So not lets process and see how to use my personal finance calculator.

Step 1: Feed the Initial Data

Use of this financial calculator is easy. Just type in some values in the “data entry” field, and it will generate the results on click of the button. What value to be entered into the calculator? The calculator would like to know the following details about you:

  • Your age.
  • Retirement age.
  • Your monthly income & expense.
  • Current Retirement Savings.
  • Child’s age.
  • Priority for the child.
  • Value of home you possess.
  • Value of home you wish to buy next.
How do i stop overspending - 7 Calculator Data Entry

Step 2: Check the results

The result of this calculator will help you to judge this:

If you are already investing: It will tell you, if you are investing enough or not to meet the goal.

If you are not already investing: It will tell you, How much you must invest per month in next days to meet the goal.

How the calculator will give this clarity? It will populate the number as soon you will click the “Calculate” button. The populated numbers will be shown as indicated below:

What common family men needs to achieve primarily in their lives?

  • Build a Retirement corpus.
  • Own Home.
  • Give financial support to children.

This financial calculator will present you the following:

  • “Current savings” vs your
  • Monthly investment requirementnecessary to meet the forthcoming goals.

Current savings – Shown as “Savings per month (Rs.)” in the calculator.

Monthly Investment Requirement – Shown as below in the calculator:

  • (i) “Monthly Investment (SIP) for retirement”.
  • (ii) “Monthly Investment (SIP) for child plan”.
  • (iii) “Monthly Investment (SIP) for home”.
  • (iv) Total Monthly Investment (i + ii + iii).

If your ‘current savings’ is less than ‘total monthly investment requirement’, it means you just cannot afford to overspend even a dime.

If your ‘current savings’ is more than ‘total monthly investment requirement’, it means you can afford to overspend the differential amount.


How do I stop overspending? If this question comes again in your mind, you exactly know what to do, right? Ok, let me summarise the whole thing again in conclusion.

Overspending is caused due to our psychological weakness towards spending in excess. Hence, preventing self from overspending, require mind control. How to control mind?

By making mind aware that there are more important expenses that needs to be managed first. How to make the mind aware of it? By doing the following logical things:

  • Listing of priorities.
  • Quantification of priorities.
  • Quantify using a financial planning calculator.
  • Compare ‘current savings vs future ‘investment requirement’.

A person who has enough free cash after managing all future ‘investment requirements’, can afford to delve into the luxury of overspending. Other can’t enjoy overspending.

Have a happy financial planning. I wish you are among those people who can afford overspending. For the rest, I will say, focus on your priorities. Quantify your priorities of life. This will eventually help you to stop overspending.

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