I read another fantastic post today over at Frugal Dad about “How To Become A Debt Killing Machine”.

What I got out of the article is that in order to put a smack down on spending, you must see “overspending” as a living, breathing monster.

See it.

Smell it.

Touch it.

And then stomp it.

As a red-blooded carnivore, the article really appeals to me and I encourage you to read it thoroughly (as soon as you finish this one of course).

Reading the article made me revisit how my wife and I became debt-free.  And to be completely frank, the secret weapon I have is my wife.  Together, we decided to take our budget to the Octagon and put a beat-down on overspending until it was dead. Very very dead.

In fact, I believe that if you have a partner, the only way to triumph over this or any other financial challenge is if you are both willing to work together.  Think tag-team.

Over the many years I’ve spent as a financial adviser, I can tell you that having agreement of purpose within the family is the single most powerful determinant of success or failure.

Are you and your spouse on the same team?  Are you both crystal clear on who the enemy is?  Do you sometimes make the mistake of thinking your partner is the enemy?

You might be all fired up and ready to take on the world but if you and your spouse are at odds, you’ll end up fighting each other rather than using that energy to defeat the real bad guy.

How do you and your partner get together on this?

As I see it, there are 5 steps:

1.  Discover if you have “goal agreement”.

I’ve learned (the hard way) that what I think isn’t always that important.  Shocking…..I know…but true.

When it was time to launch the attack on our spending, I didn’t  deliver my prepared speech.  Instead, I just asked my wife what was important about money to her.

She told me that she valued family and security.  As it happens, that’s what I value as well.

At that point, we had a filter through which we could make intelligent decisions.

2. Define overspending.

In our case, it’s a bit strange.

My wife  has a lot of family that live overseas and she’s very close to them.  We worked out a budget that provides a yearly amount she uses to visit her family.  Our own “vacations” are very frugal because a big chunk of our vacation money is used to defray her travel costs.  We made this a priority. For us, it’s not overspending. We realize that the money we spend on her trips slows down our retirement plans but it’s a trade-off we’ve made consciously and we are OK with it.

However, “going out” is overspending – so we rarely do it.  When friends invite us out, we usually decline.  We can do this because we understand what our priorities are and we know we can’t do it all.

It may seem strange to you that we spend a great deal on travel yet we are unwilling to go out to Wendy’s…. but it works for us.

How do you define overspending?  How does your partner define it?  Please don’t try to go to the next step until you agree on your terms.

3.  Keep Track.

Once you have agreed on your goals and defined what overspending is, the next step is to set up a system so you know if you are on track or not.

There are a number of methods you can use to do this.  Personally, I like the 5-minute a month method. The quick summary of this method is to simply use your bank statements to calculate a 24-month moving average of your spending.  For more information, click here.  However you do it, the important thing is that you have a method by which you measure your success.

4. Monthly meetings.

This is the most critical step.  You have to arrange a set time each month to discuss your progress.  We just  go over the bank and credit card statements every month.  We have this meeting with the kids too.   We discuss why we made certain purchases and we offer ideas on how we can do better.  It’s a process….and we are getting better at it.

5. Be ready – you may not win every round.

I’ve noticed lately that we spend more money during the summer.  We can certainly cut down on some of the expenses, but at the same time, it’s a fact of life and I accept it.  Fortunately, the system I use to track spending calculates a moving 24-month average so the high and low months average out. I’m not a “budget brown shirt” and neither is my wife.

Sometimes, in the middle of the month, I’ll see spending go a bit too far.  Often, I won’t say anything.  I just wait until we have our monthly meeting.  I’d much rather my kids or wife bring it up.  In other words, I’m a big fan of “teachable moments”.

Do you think it’s possible to make financial progress without having your partner on board?  What other tips have you got to help other Wealth Pilgrims in sending overspending to the ER?

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