For three months, you need to write down everything you spend, by category (food, housing, transportation, entertainment, credit card bill, school loan, tithe, etc.), and keep the receipts. When people first get into a money crisis, they have a tendency to spend the way they always have, rather than accept the new reality. Even if they are living off their credit cards (and creating big debt for themselves), they keep spending like nothing has changed. EVERYTHING HAS CHANGED! You need to know HOW MUCH MONEY YOU HAVE TO HAVE TO MAINTAIN YOUR CURRENT LIFE STYLE.

If you have never written down where you spend every penny, you will probably be annoyed with this exercise. This may be the most important of all the Steps, so don’t skip it. If you put every receipt in just one place, and if you pull out the day’s receipts and copy them onto a notebook before you go to bed each night, you will eventually get in the habit. Do not spend too much time trying to create categories. At first, it is okay to list grocery receipts and fast food amounts in the same column. You need to take the responsibility to know how much you cost, and you may discover that you are wasting money on things that are not that important to you.

If you successfully keep up with how you spend your money for one month, buy yourself a little treat as a reward. Then continue this exercise for the next two months. Some expenses occur only once every three months, others once or twice a year. If you don’t have three months worth of information, you won’t really know what you cost.

FRUGAL! That is a word that we rarely hear in our consumer-driven society, but learning to be frugal will help you to pay for yourself. To see how someone else is trying to explore being frugal, check out Natalie McNeal's blog at The Frugalista Files.

After you have a steady income and one month’s worth of receipts, you are ready to begin Step Six.