When I was first writing short stories, I would typically write about 1,000 words in one tranche, and then come back and write the second half another day, leaving me time to think and let a little serendipity take its course. My finished product would be a neat 2000 word story, ready for the competitions (after a few months editing). Over time, my stories have begun to get longer. I still stop for a break in the middle (or perhaps 2/3rds through), to allow some magic to influence the what happens next section, but the end product is now typically 4000 words, and sometimes close to 5,000. I'm not quite sure why that has happened, or even if it is a good sign (easier to write) or a bad one (lazy, spewing of words).
My initial edit is to cut the story back - typically by 500 to a 1000 words. That can leave me at the 3500 to 4000 mark. At this point I have a dilemma. I look at the word limits for the various contests, and I have to decide: do I enter this story into the competitions with a 4000 word limit? Or, do I work hard to get it under 3000, and widen the circle of contests where it could be deployed, or should I be incredibly ruthless, 'kill my darlings' and aim for 2000? I haven't yet found a good answer to this. What I can say is that I indulge myself with the first version, and then gradually cull the words, entering it into a broader set of contests as the word count shrinks. At first I used to keep the original versions, thinking one day I would go back to the expanded versions, but I've stopped bothering with that. I've discovered that I almost always prefer the cut-back, trimmed versions. May be I should aim to halve the word count on every story after the initial first draft... what do you do?