#2: Know what you own and what you owe.

Clarity about finances is essential to improving your money situation.

Early in the drama when I found out my husband had borrowed money from his father and was still unable to meet our bills, I insisted we try Debtor’s Anonymous, a 12-step program for compulsive debtors or anyone interested in improving his or her relationship with money and debt. I call it the Weight Watcher’s of Finance.

Here, I learned about going from “vagueness to clarity,” meaning if you don’t know how much money you’ve got, or owe, it’s likely you’ll mismanage it.

Using one of the tools of the program, I started writing down every dollar I spent so I could, in time, create an accurate spending plan. What did we really spend?

Later I took a bold, scary step by looking at our credit reports (with my husband’s permission) and indeed discovered a heap of distress. Yes, it was frightening to look at but I wouldn’t have been able to fix it if I didn’t have the facts.

Awareness is key. You can’t fix what you don’t know.

Bottom Line:
Be brave. Write down what you own (assets) and what you owe (liabilities).

Take your time. You won’t be able to tackle it in one sitting.

If you know what you’re dealing with in black and white, your situation is bound to improve.