If money really could talk, what would yours say? For some, it’s saying Good-bye? Is it me or is everything more expensive? A few weeks ago my wife asks me to pick up a few items from the grocery store (bad idea).

Something told me to eat before heading there, I didn’t (another bad idea). After getting the requested items and throwing in a few “extra” snacks to curb my appetite, I couldn’t believe the final cost of 12 items. I’m shocked! Not only is food expensive, I’m discovering EVERYTHING is expensive.

Buying a house is expensive. Cars are expensive. Buying quality foods cost more than buying processed food. And guess what, it’s expensive. Schools are expensive, especially for those paying off massive student loans with under paying jobs.

Being single is expensive. I know being married is expensive. Kids are VERY EXPENSIVE. And there’s no doubt that getting divorced is expensive. What’s the point: EVERYTHING is expensive, but that’s not the real reason why you’re broke. So if you’re ready to stop complaining about how expensive things are, then here’s the remedy — the real reason why you’re broke.

You Don’t Have a Budget

Money without direction will disappear. Let’s face it, we don’t like to budget. Why? It takes time, energy, and effort. Budgeting is a word that strikes fear into our hearts. Why? Because it’s boring, limiting, humbling, and at times depressing.

I have a confession, I don’t like doing a budget. Microsoft Excel, Quicken, calculators, and graph paper don’t have a ton of appeal, at least for me. What’s the solution? Find a method that works best for you, use it, and stick to it. Remember, money without direction will disappear.  So, how do you begin?

First, write down every single dollar you owe. The money you borrowed from friends and family – write it down. That student loan you’re slowly paying off…write it down. Put the remaining balance on the list.

The same goes for your rent/mortgage, car loan, and everything you eventually need to pay off. Don’t put your groceries, utilities, or Internet bill on the list; that comes next. Once you think you have every single dollar you owe written down, add it up. The total is your debt.

Next, make a list of your monthly expenses. Groceries, utilities, Internet, gas, monthly payments, and anything else you can think of. Don’t ignore vices like liquor, cigarettes, clothes, or mini vacations. Once you have a complete list of your monthly expenses, add it all up. The total is how much money you’re spending each month. Keep this list for step #3.

Last, but definitely not least, write down your monthly income, AFTER TAXES. Take this number and follow this formula:

MONTHLY INCOME – MONTHLY EXPENSE TOTAL = YOUR FINAL INCOME

Your final income is the money you have left over each month after paying all your bills and other expenses. If this number is in the black zone (over zero), then you’re doing okay, even though you could always do better. If it’s in the red zone (a negative dollar amount), then guess what? You’re losing money. Your financial picture needs to be fixed right now.

Unless your debt is lower than your final income, you’re in over your head and you need to do something about it. Now that you’ve stared the beast in the eye, suit up, roll up your sleeves, and tackle this problem like nobody’s business. It will be difficult and it will take some time, but it needs to be done. It will be worth it. You can do it. Feel me.

Whenever you’re ready, take a deep breath and move on to the next step. Giving Up Bad Habits.