Before you can fix any of your financial problems, you have to have a clear assessment of your entire financial picture.
After all, it doesn't help you to only address part of your problem since most financial problems are related to each other in some way.
And let's face it, when things are dire, many of us go into denial.
It's tough facing up to financial difficulties when they seem insurmountable.
However, the only way we can fix the problems are to understand the problems.
So, first of all, you should determine your net worth.
Net worth is defined as the sum total of your financial assets minus the sum total of your financial liabilities.
Financial assets include money, stocks, bonds, mutual funds, retirement accounts, and business shares.
Do not include your home unless you plan to sell it someday and to live off the proceeds of the sale.
Do not include personal property such as clothing or cars either for the purpose of this exercise because you cannot live off those assets either unless you sell them.
Financial liabilities are debts that include credit card debts, auto loans, student loans, private loans, etc.
Do not include mortgage debt unless you included your home as one of your assets.
Once you've determined your net worth, compare it to your annual income.
If your net worth is less than half of your annual income, this is not a good sign, especially if you are over age 30.
This is the riskiest group and the group that needs to be the most diligent about turning around your finances.
If you fall into this group, make it a priority to pay off debt and build up an emergency savings of 3 to 6 months of living expenses.
If your net worth is more than half your annual income but less than a few years' annual income, you are doing OK but should probably still accelerate your savings.
If your net worth is several years of annual income, you are doing exceptionally well.
When you have a clear picture of where you stand financially, you can then formulate a plan for improvement.