Financial First Aid: Evaluate the Problem

First, find out where the money goes: Track your buying habits for at least 30 days. You don't need a complicated tracking system. Just throw all of your receipts into a basket on the dining table for a month. This will give you enough information. If the seller doesn't give receipts, use a sticky note and write down the item and cost.

At the end of the month, sort the receipts into categories, and add them up. Look at what you are buying. How much of it was absolutely essential? How much do you buy out of habit? How much do you really remember buying? A crappuccino, bought out of habit and gulped in the elevator, isn't an experience worth repeating.

One side effect of keeping track of your buying habits is that you become what Buddhists call "mindful" ... aware of your actions. If you discover yourself starting to buy something and then deciding "I don't really want that" ... that is mindful spending. It's a good state of mind.

Then go on a 30-day money fast: If it isn't absolutely essential for your survival, don't buy it. Live on what already have in the house for as long as possible, then buy food. Do not hand over money for clothes, jewelry, gambling, restaurant meals, fast food, lottery tickets, movies, pay-per-view TV, online porn sites, booze, bar hopping, hairdressers or manicurists. It's only 30 days ... you can do it. At the end of the 30 days, evaluate what you missed and what you didn't miss.

NOTE: If you or a family member suffers severe emotional distress when going 30 days without buying something, you have a deeper problem than just careless money habits. Compulsive spending is guaranteed to keep you close to financial death.

Adding a bit of personal experience: I had tenants who could never quite scrape together the money for repairs to their oil-guzzling car. The car needed a quart a day. They always had enough money to stroll to the corner store for cigarettes, cola and candy. If they had gone without the ciggys, cola, and candy for a month, the car could have been repaired, and the expense for the daily quart of oil for the car would have been gone.

Eventually I evicted them because they weren't paying the rent, because he lost his job, because he missed too much work, because the car needed repairs.