Ha Ha... Is she a nice lady apart from her overspending attitude, you can talk to her and explain her. If not, you need to restrict giving money else, do smart things in such a way that hold is not in her hands to spend.
Is she good to you! So that you can counsel her the facts and why she should not do that? What does she overspend over ? Who's money is that ? Are you a working woman giving money for her where she overspend ! Who buys the basic things like provision, vegetables, any additional things required for the family. What is your husband;s opinion on this? If required, he can also counsel her... right...