What happens when you’re overspending?

2023-07-06  2 minute read

Jeane Herman

Lifestyle Debt

Are you buying things you truly need or giving in to impulsive purchases? We’ve all been there! Ticking an item off your wish list or treating yourself to an expensive meal can be momentarily rewarding but can also lead to a pattern of overspending. Overspending causes financial stress and can quickly spiral out of control, resulting in debt and anxiety.

Take a moment to review your spending habits and identify your spending triggers. It could be your emotional state, lifestyle choices, or external influences. Whatever the cause, you can gain better control over your finances by making several changes to your financial life, such as budgeting and goal setting.

Young couple discussing finances in home office.

Case study

MNP Debt helped Kate take back control of her finances after she discovered she was overspending and piling on debts. She sought the help of a Licensed Insolvency Trustee who set her on the path to financial freedom.

Kate never thought she had a spending problem. She earned well and spent freely on anything she wanted. Her spouse recommended starting a budget to help track their expenses and debt payments. He convinced her that they needed a budget if they were going to pay off their debts, so Kate agreed to create a plan.

Months down the line, nothing changed about Kate’s spending habits. She was still spending as much as she used to. The family debt was mounting, and the budget was failing. She admitted that her spending habits contributed to the amount of debt they had to repay.

Kate and her spouse decided to revisit the budget, and this time, she would commit to sticking to it. They set three major financial goals for the short, medium, and long term. The short-term goal was to get rid of all their debts by making lump sum payments over a period of 10 years.

And still, Kate had a hard time controlling her spending. She started to investigate her triggers and while researching the subject, she came across useful information about budgeting, communicating, setting rules, and seeking professional help.

She finally felt motivated and armed with the tools she needed to face her debt head on. But when she sat down to do the math, she quickly realized that it would take 15 years or more to get rid of all the debt her family had accumulated. She knew it was time to speak to a professional, so she reached out to MNP Debt to set up a consultation.

Kate and her spouse sat down with a Licensed Insolvency Trustee (LIT) for a Free Confidential Consultation days later. The LIT listened to their story and introduced them to the two government-legislated debt solutions – Bankruptcy and Consumer Proposal – after reviewing their unique financial story. They also learned about the benefits and drawbacks of both options and alternatives such as debt management and debt consolidation.

The LIT recommended a Consumer Proposal, a flexible process that allows Kate and her spouse to negotiate the terms of their repayment to unsecured creditors — including the amount and timing. Under a Consumer Proposal, the couple would retain all their assets and can improve their credit rating during the Proposal period.

After getting the full picture of their Proposal journey, the LIT started the paperwork. Kate and her spouse were confident that their family could be out of debt in under five years with the debt relief solution they had chosen and a commitment to budget and save.

If Kate’s story feels familiar or you find yourself grappling with debt, there are solutions available to help you get back on track. It's important to seek help early from a Licensed Insolvency Trustee to find the right solution for your unique situation. Contact us for a free, no obligation, confidential consultation to discuss your options and find a Life-Changing Debt Solution that best fits your needs.

Jeane Herman is a Licensed Insolvency Trustee with MNP Ltd.

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