Excerpt: 'Enough Already'

March 12, 2009 — -- With his new book, "Enough Already!," Peter Walsh hopes to bring the craziness and unbalance in your life to an end. By focusing on six key areas of your life— family, relationships, work, health, money and spirituality — Walsh discusses how parts of your life are interrelated.

Read an excerpt of the book below and click here to hear an introduction to the book.

Money

We are confronted daily with many conflicting messages: Buy, buy, buy. Save, save, save. Spend your tax rebate. Put money away for the future. The problem is compounded by the amount of "stuff" we see around us. Things are cheap, credit is easy to get, and we feel we deserve to have whatever we want, whenever we want it. But, and you know this, individually and as a nation we are spending more than we are earning, and sooner or later we'll have to pay the price of having whatever we want whenever we want it. It's easy to pull out the plastic, but not so easy to make the payments when gas, groceries, and the price of most other commodities is rising daily. If you have credit card debt and no idea how to get rid of it, you're not alone. But the fact that many of your fellow Americans are equally trapped in financial quicksand is no excuse, and it doesn't mean you're going to be okay. The stuff that chokes your home may well also be choking any chance you have for financial health. If this sounds like you, read on!

Clutter takes us out of the present. The homes that I work in are usually filled with either "memory clutter"—the stuff that holds us strongly to an important person, an achievement, or an event in the past, or "I might need it one day clutter"—that's the stuff that we're keeping for that "just in case" moment sometime down the track. It's a wonderful thing to have important objects to remind us of beloved people or events from our past. It's useful to plan for an unpredictable future. However, people become so preoccupied with what they have that they can't focus on what's most important—the here and now. Without a balance between these "past and future items," combined with a keen awareness of what is needed now, there cannot be peace and harmony in a home.

As with the stuff we own, so with the money we have. It's exactly the same.

Our culture urges us to become financially irresponsible the day we leave home or even before we fly the family nest. Credit card applications clutter your mailbox, promising that you can acquire all the trappings of adult life—cars! furniture! trips! dinners at fancy restaurants!—before you even have your first job. So we buy things. We buy whatever we want. Even before we start earning money, we've been so barraged with attractive advertising that we feel we have to go right out and spend. According to Nellie Mae, graduate students carry an average outstanding balance of over $8,000 on their credit cards. With employment comes easier access to money—either from an income or from one of the 1.3 billion credit cards burning a hole in our collective pockets. So our houses fill up—first with what we need, and then with stuff we don't need and, in fact, never use. If only we were able to save as well as we are able to spend.

Not so long ago I worked on a home that was floor-to-ceiling clutter. I estimated that there was more than $500,000 worth of purchases in the home, most still sitting untouched in the original shopping bags. When the unused items were sold—online and at a yard sale—the family made less than $20,000. The worst part of this story, however, is that the couple is in their sixties, in deep credit card debt, living off their home equity line, and with little savings or investments. Quite literally, the clutter is stealing this couple's financial security.

No matter how little or how much money you earn, managing your money is simple. Yes, emergencies happen. Yes, jobs are lost. Yes, health insurance in this country is a real problem. Yes, living is expensive. I'm not saying you'll never end up in the hole. But there is a way out. There is a way to recover and there is a way to save. It all starts with cleaning up the mess you've made. Do you hide financial records from yourself or your partner? Do you leave mail unopened and bills unpaid for longer than you know you should? Do you feel guilty when you think about what you spend or what you owe? Do you feel scared when you think about your financial future? Do you buy on impulse and later regret the purchases? Do you spend with no idea of how much you have or what you owe? Do you have something as basic as a budget in place? Let's see just how much financial clutter you've got to clear away.

Imagine the financial life you want

Bills and paperwork can be overwhelming, especially if you're hiding bad spending habits behind disorganization. The first step to clearing your financial clutter is to set some goals. You work to earn money to live your life. Finance is about how you spend and save that money. Spending is about enjoying life today. Saving is for the future. Your financial goals should accommodate both. Let's get some organization into this by thinking about what you need and want today and in the future.

Your emotional relationship with money

We -aren't born knowing how to handle money. Our parents, peers, culture, and life experience guide us. Every household teaches different lessons, large and small, about the role of money in life. I know two families who lived next door to each other. In one house the children were taught to turn out every light in the house when they left home. If they left a light on, they had to put ten cents in a jar toward the wasted electricity. In the house next door, the children were taught to turn on all the lights before they left the house to ward off intruders, electric bill be damned! This may seem like a small difference in philosophy, but imagine what life would be like if the children from these two houses married.

My acquaintance Jon is a very successful investment banker. I can only imagine how much money he has socked away, but what I do know is that he has three lovely vacation homes in different parts of the country. He wears custom-made suits, owns several luxury cars, and eats at the finest restaurants in Manhattan. But join him on a trip to the grocery store and you'll see a different man. He agonizes over each purchase—should he really buy the yellow pepper that the recipe calls for when green peppers are half the price? Why purchase the fresh orange juice his wife has put on the shopping list when the frozen juice he grew up with is half the price? The Jon who emerges in the grocery store is fully defined by the financial upbringing his Depression-era parents gave him.

What are the lessons your parents taught you about money? Were they careful with how they spent money? Did they cut coupons and count pennies, but spend lavishly when it came to vacations? Are you imitating your parents' spending patterns or reacting against them? Were you taught to handle money? Did your parents give you an allowance and ask you to take responsibility for certain expenses? How old were you when you became aware that there were certain things your parents could and couldn't afford? Did your parents keep you completely in the dark about how much money they had, how they decided to spend it, and what role it might play in your life as an independent adult? What effect have your peers had on your attitude toward money and spending? Do you spend more to keep up with them or do you see your friends making smart spending choices?

What is the emotional tenor of your relationship with money? Do you think of yourself as "bad at math" and leave the bill paying to someone else? Are you intimidated by investing? Do you feel entitled to certain material goods, regardless of how much they cost? Do you spend money impulsively and regret it later? When did you start doing this? Why?

How does your relationship with money have to change? Do you need to overcome fear? Do you need to educate yourself by reading a book or taking a class? Do you need to explore your sense of entitlement—where it came from and whether it is realistic—in order to bring your spending under control? You can't lose weight without eating fewer calories, and you -can't save money without spending less. If you -aren't happy with your financial situation, you'll have to remove emotion from the equation when it comes to your spending decisions. If you earn $100 and spend $90—no problem. If you earn $100 and spend $110—there's a problem. It's that simple!

Today's needs

How much of your income do you need to survive? Are you able to take care of those needs? Remember, you're just talking daily sustenance here. How much do you currently spend on food, clothing, and shelter? How much debt do you have? Is it "good" debt or "bad" debt? Good debt is money that you borrow toward something that will produce cash flow, like taking out a mortgage to purchase a home, which gives you a place to live, a tax advantage, and an asset that grows in value over time. Student loans also fall under this category—school increases your earning power. Bad debt is money that you borrow to purchase disposable items, often with a credit card. If you don't make monthly payments in full, you're effectively paying more for the items you purchased. What seemed a bargain the day you purchased it isn't such a deal when you're barely touching the principle and paying 25 percent interest on your credit card balance three months later.

Today's wants

Often when I am looking at the clutter in someone's home, the homeowner will exclaim with a lot of pride: "I'm a great shopper! I can find a bargain better than anyone else!" If you ever go shopping "just for fun," then every single thing you buy on one of those expeditions falls into this category—the stuff you want but don't need. You usually know when you're splurging. But in today's world, some of your luxuries have started to feel like necessities. If you're not successfully managing your money, spending responsibly, and saving for a rainy day or your retirement, then you're not entitled to a high-tech TV with cable service. That is a luxury. If you're not managing your money, then you're not entitled to expensive restaurants and prepared foods. Those are luxuries. If you're not managing your money, designer clothes, fancy cars, jewelry, and vacations are luxuries. If you have credit card debt and/or you're not managing your money, these are the areas you're going to have to examine for costs to cut. Notice some repetition here? If you're in a financial hole or struggling with your money and are serious about turning things around, these luxuries are the first things that have to go—no discussion!

Tomorrow's needs

Think about the major expenses that you know -you'll have in the future, and imagine those that might take you by surprise. Will you need money to pay for a wedding—yours or your -child's? Is there a chance you'll want to go back to school? Do you have children you hope will go to a private college? Do you own a home? How long will you be making payments on it? What maintenance is due? Will you need or want to move to a more expensive place?

As you think about your needs in the future, you must anticipate unpredictable circumstances. What if you have a serious car accident? You'll need insurance and money set aside to deal with medical expenses and lost income. What if something happens to your spouse? A parent? What responsibilities might you have and will you be able to afford them?

At some point, you will want to stop working, and at some point, whether you like it or not, you will have to stop working. Think about it. You won't want to move to a shack at age 67. You don't want to subsist on food stamps. You'll need to pay for health insurance, which is all the more expensive in your twilight years. You will still have monthly expenses, but your income will drop significantly. You'll want to have life insurance at rates that are locked in when you are young and healthy. You have to have savings if you want to sustain or improve your standard of living.

Tomorrow's wants

A nest egg

Clear the clutter of unreal expectations

So go ahead, envision your ideal financial life, but try to focus on living your life, not filling it with objects. Remember that extra stuff always comes at a cost. When you make a decision to spend money today, you are responsible for that decision. If you spend all your income on luxury goods when you are young, -you'll pay the price later. Try to appreciate what you have. -It's not about depriving yourself, -it's about striking a balance that enables you to spend responsibly and live without the stress and anxiety that come with financial problems. Curb the urge to acquire, and -you'll have more time and means to take pleasure in life.

Watch out for obstacles

I-know-I-shoulds

Andrew is an architect in San Francisco. Andrew -doesn't earn a lot, so he, his wife, and their three children save where they can, shopping at discount clothing retailers and driving an older--model car. He -doesn't have money set aside for the children's educations, much less college, but he figures -they'll find a way to make it work. On the other hand, Andrew loves new technology and his family always has the latest—from the latest--generation iPhones for him and his wife to fancy cell phones for his elementary school--age children. They love to dine out at the best new restaurants, with their children, and they enjoy going on expensive vacations every year. Andrew loves his life, which matches that of their social set. He knows he should resist these expenses, he worries, and he never goes into debt, but he watches their hard--earned savings drop a little each year.

My friend Eleanor is a successful freelance writer. I was chatting with her about her plans to buy a Manhattan apartment when it came out that she had all of her savings in a bank account. She had more than $60,000 just sitting there earning less than 1 percent interest, and most of it had been in the same account for over ten years! The long--term average return for the stock market is around 10 percent. Do you know how much that means she could have earned? Neither do I. I understood compound interest for five minutes in high school, and right at this moment I'm regretting that I -didn't pay more attention so I could do the math. At any rate, I know she made a mistake, and she knew it, too. Too nervous, too busy—whatever it was—she never got around to the very simple task of opening a brokerage account and buying a mutual fund or two.

If you know your finances -aren't in shape, today is the day to start making changes. Forfeiting your $3.75 custom--brewed, extralarge, nonfat, no-foam latte every day for a year saves you more than $1,300. When it comes to spending and saving, small changes accumulate over time. Interest compounds (just -don't ask me to do it for you) and that means money in your pocket.

Debt

Spending as leisure activity

When did recreational shopping become such a major participant sport in this country? -It's so popular it has to be close to being included as an Olympic event! Anytime you head out to a mall, a shopping district, or a favorite store without a specific idea of what you need to buy, you are shopping just for fun. Think about it: Is spending money on clothes, music, electronics, or anything else one of your favorite activities? When you bring new items home, do they sit in the closet with the tags still on for weeks, months, even years? This is a really common sight in the homes I declutter. For many, many people in our consumer culture, recreational shopping has become an antidote for boredom or unhappiness. Shopping is the primary hobby of many people with whom I work. These people -don't get as much pleasure from the items purchased as they do from the shopping itself. For most people who shop to shop, it is the addictive thrill of the purchase that keeps them going, the actual item acquired is secondary and is often forgotten quickly after being brought home. Unless -you're loaded with cash, this pastime will get you in trouble, big trouble, and fast! The constant purchasing not only fills your home with the clutter of unused items, but it also drains your bank account and drives up your credit card bill. The clutter of the stuff and the clutter of the debt make an impressive—and daunting—team.

Lack of prioritization

If you -don't have a major shopping problem, -there's no need to go cold turkey. You just need to make smart choices about when and how you spend your money. There are infinite nice things you can purchase. How do you know when to stop if you -don't have a sense of what you can afford or how to stay on budget?

Fear and denial of the future

Paperwork procrastination

Declutter your finances

Commit time

The purpose here is to get a clear snapshot of where you stand financially—what you have, what you own, and what you owe. This may be frightening, but the clarity that comes from having a clear understanding of your financial situation is more empowering than you might imagine.

Communicate

Shared goals

When you fall in love and decide to spend the rest of your life with someone, the first conversation you have usually -isn't, "So, are you fiscally responsible?" Consequently, money is one of the earliest and biggest problems to crop up in many long--term relationships. Money is one of those key issues, like child rearing, that people have deep beliefs and views about. Rarely do couples have the same attitude about money. Most of us -don't find money the most romantic topic of conversation, but the problems that come with financial clutter are real and worth clearing away. Otherwise they can grow to be as painful and out--of--control as any home overrun with all those things someone inherited from his grandparents and just -can't seem to let go.

If your attitudes toward spending are wildly diverse from your -partner's, the best way to resolve them is on paper. Instead of criticizing money choices, decide on your financial goals together. You need to have a shared vision for your finances in the same way you need to have a shared vision of the life you want. In both cases, the vision comes before you decide how best to deal with the clutter. Calculate what you need to save to reach your vision. Once you establish your goals, you will know how much money you can spend on luxuries. Only at that point should you start to discuss what level of spending is reasonable and how to manage it.

Spending quirks

Spending secrets

Set boundaries

The concept of a budget is one that terrifies many people. -They're worried about the restrictions a budget will place on their spending. But budgets, like room planning or deciding what will best fit into a space, are actually a step toward greater freedom rather than less. In your decluttered home, I ask you to set boundaries by only keeping the amount of stuff with which you can comfortably live the life you want to live. In relationships, those boundaries are more abstract and personal. At work, you need to establish boundaries that separate your work life and your home life. When it comes to money, you need to set boundaries that help you balance your needs and desires in the present and your needs and desires in the future. With clear boundaries, there are no unwelcome financial surprises and your financial situation is clearly laid out. This type of financial organization frees you from many of those nagging worries and concerns about the unknown.

That said, I'm not a fan of keeping a budget that is so meticulous that the budget becomes a source of stress and discord. A budget should be a tool to help you manage your money, reach consensus on what is reasonable spending, and track the financial health of your family. If the budget becomes an end in itself, -it's unlikely that -you'll have any commitment to sticking to it for long.

Why not give it a shot? Here -let's create a one--time budget, a budget for grown--ups.

Now wait. Before you get too excited about how much you have to spend, consider this: You -haven't factored in food, clothing, savings, or emergency funds. Now I want you to examine the last three or more months of credit card bills and bank statements to see how much "discretionary" money -you're actually spending on a monthly basis. Is it more than you have to spend? Are you just breaking even?

Decide how much of your discretionary money you want to save each month. Decide where you want to save it (direct deposit to a money market account works), and put it there the day you get your paycheck. Then you have a general sense of how much money you have to spend for the rest of the month while guaranteeing that -you're putting money away to pay off debts or build a nest egg. If your current spending rate is in line with your goals, great. If not, choose some cuts that will put you in the right range. Instead of counting every penny you spend, -you're making a lifestyle adjustment.

Break the shopping habit

The idea of spending money to save money is one that I encounter often. Something is a bargain—or a "real bargain"—so -you'd be crazy to pass it up, right? You bring the "great deal" home and, because you -don't need it right away, you put it away in a cupboard or closet and there it sits. -Here's the bottom line—as long as there are shops and markets and malls (or the Internet), there will always be another bargain, another sale, another deal. My grandmother was so right when she said that you can go broke saving money. Leave the deals where they are, keep the clutter at bay, and put a little something in the bank.

Once -you've identified the triggers that compel you to shop, look for new activities to fill those needs. Can you fill the empty time with equally fulfilling activities, like pursuing new hobbies, exercising, or spending time outside? Try imposing a six--month moratorium on shopping. Nothing except the bare essentials (food, cleaning supplies, toilet paper) comes into the house. -It's a challenge, but not only will you see how few purchases you truly need, -you'll jump--start your savings.

Look to the future

Make changes

1. Clear away the paper piles. The only way to face the reality of your financial situation is to start with a clean slate. Your financial life will not take care of itself. Look to the place in your home where you currently manage your financial matters and ask yourself: Does the financial management of my life have a high priority? Show that you give priority to managing your finances by establishing a place in your home for paying your bills, keeping financial records, and managing the money aspect of your life. You give priority to what you think is important.

2. Get out of credit card debt. Hands down, credit card debt is the most destructive type of clutter you can have in your life. No matter what your financial goals are, the first change anyone should ever make is to overcome credit card debt. In case you -didn't notice, credit cards have the highest interest rates around. They are ruinous. The interest that -you're paying on that debt is higher than the interest you might earn on even the best investment. So before you invest a single dime, you need to work to pay off your credit cards once and for all.

Experts agree that the best—and possibly the only—way to pay off credit card debt is by yourself, little by little. Gather all your credit card statements together. For each card, write down the total amount you owe, the minimum monthly payment, and the interest rates.

Pick the card with the lowest interest rate and destroy all the other cards. From now on this will be the only card you use, and you will only use it for essential purchases until you have paid off all of your debt. Start paying with cash.

Add up your minimum monthly payments. At the very least, commit to meeting them every single month. If you miss a payment, your interest rate goes up, your credit score goes down, and it will be harder and more expensive for you to borrow money in the future. On top of paying the monthly minimum, you should commit a minimum amount toward reducing the principal owed every month without ever, ever letting your car or house payments fall behind. I'm sorry, but I -didn't say this would be easy. Just keep in mind how much further your paycheck will go when -you're no longer paying such enormous interest fees on your debt. The climb out of credit card debt can be one of the toughest -you'll make, but -it's worth the focus and willpower to achieve it.

Decide on an additional amount that you will contribute to your debt every single month. Make it as big as possible. Remember, making this payment every month will bring down your minimum monthly payments. How exciting is that? Still, this is the hard part. -You're in debt for a reason—it's been hard for you to save. Think of this as a serious money diet. Only allow yourself essentials until all the debt is gone. No shopping. No birthday presents. No restaurant meals. No travel. If you have credit card debt, -you've been living beyond your means. -It's that simple. Now -it's time for the overspending to stop and the underspending to start.

Attack the cards with the highest interest rates first. As you embark on paying them off, try to get your rates reduced. Call the credit card companies one by one. Tell them -you're pleased to be a customer, but you would like them to lower your rate so you -don't have to take your business elsewhere. Even if you are never going to use those cards again (which I hope you -don't), go ahead and make that call. -Don't sound like a desperate, broke debtor. Remember, -you're paying these folks lots of money. -You're calling them as a customer who is looking for better service.

Even if you -don't succeed in getting your rates down, you have a plan. -You're paying the monthly minimum every month, and paying down the maximum you can every single month. Stick with it. Do. Not. Shop. Imagine how wonderful it will feel to put that monthly minimum into a savings account instead of into a credit card -company's deep pockets.

3. Cut spending now. -Don't spend money you -don't have. That sounds like pretty simple advice, right? But -simple's not always easy. When it comes to discretionary spending—the small spending choices you make on a daily basis—there is a basic rule: Don't spend money you -don't have. At first, you will have to work hard to keep your wallet in your pocket, but after a while you will realize that this choice has become habit. -You'll benefit twice: less clutter and more money.

4. Start setting money aside for the future. Unless -you've been given a year to live, you need to be saving for the future. If you -aren't saving, you need to make changes. I -don't want you to feel like -you're scrimping to get by. I want you to enjoy your life. But spending your way into stress, sleepless nights, collection calls, and maybe even bankruptcy -isn't worth the costs. Money -isn't the only way to enjoy life. You need to find a way to thrive without overspending. -Don't count on things changing without your taking action. Let me say that again: Don't count on things changing without your taking action. They never do. You can buy all the lottery tickets you want, but meanwhile, learn to enjoy living within your means so you -don't feel the paralyzing stress of financial clutter.

You spend too much money on stuff you just -don't need. This may sound like a bold statement—I've never met you. But I'm confident that it is true for 90 percent of the people who buy this book. You -didn't get where you are—feeling like your life is cluttered and out of control—without bringing too much stuff into your home and your life. The best way to break your shopping habits is by going cold turkey. Just stop. Keep remembering that you really need very little to be happy and they -don't sell happy at the store. Shopping is not the only recreation in the world. Get your family or friends involved in other activities. Challenge one another to find other ways to entertain yourselves. I'm confident you can do it.

5. Invest your money wisely. The first investments you should always make are those that you can do with pretax dollars. Why? Because money that you contribute to a 401(k), an IRA, or another retirement plan -doesn't count as income for tax purposes. In fact, you -won't pay taxes on it until you retire. That means more money sitting in your account, growing over the years. If your employer offers a 401(k), you should max it out. Open an IRA and contribute the maximum every year. If you have children, open 529 college saving plans, which -aren't subject to capital gains taxes, for each of them and contribute the most you can every year and encourage the grandparents to contribute cash (they'll have to do it through you) rather than bring more of the same toys every time they visit. Bear in mind that none of these retirement investments is liquid. Before you invest, make sure you have emergency funds to carry you for several months in case of illness, injury, or job loss.

6. Balance your portfolio. -Don't be scared of your money. You -don't need to be a financial wizard to invest your money so that it grows over time. The key words are "over time." All investments have some level of risk, but over the long term, the stock market has only grown. What that means is that if you are truly saving for a retirement that -isn't on the imminent horizon, you can bear some risk. Why? Because you -won't be withdrawing the money for a long time, so if the market falls, you -won't feel the loss. By the time you need the money, it will have bounced back, and, by the miracle of compound interest, the more years -you've had money in the stock market, the more the amount that you have will have grown.

Where to go for help

If -you're ready to take it to the next level, discount brokerage houses like Vanguard offer onetime financial advice with a flat fee (for Vanguard, the fee is $1,000 per year if you have less than $100,000 invested). Your bank probably offers advisory services. Or ask friends to recommend a money manager who can make onetime recommendations or handle your investments for you. Get some sound financial advice. Understand what -you're doing. If unsure, ask lots of questions until you feel comfortable and informed. Capital gains taxes can affect your profit significantly, so don't buy and sell willy--nilly. You need to factor in how long -you've held an investment.

Live in the present

Live within your means

Vacations

Stay close to home. Save on the airfare by being a tourist in your own town or city, or traveling within driving distance.

Visit friends who live someplace cool. Just make sure -you're entirely welcome, -don't overstay, and splurge on a generous host gift for them.

Rent an apartment with a kitchen. -You'll save enormously by not eating every meal out.

Treat yourself at home. Eat out and have massages in your hometown every day for three days. Go visit those local attractions that others come to your city to see but you never do. -You'll spend far less than you would for a week out of town

Eating out and takeout

A romantic dinner. A picnic is the most romantic homemade meal around. If the weather -isn't right, have a picnic on your living room floor. If your living room -won't cut it, choose certain nights to put a special romantic spin on dinners at home. Find a new menu online, light candles, and save the dishes for the morning.

Eating out. Eating out costs more than eating in. And it -doesn't necessarily save time. If you prepare your food at home you can use the "in the oven time" to do other things, like talk to your kids or partner, pay bills, decompress, or walk the dog. You saved money and bought yourself some time. If -it's the effort of cooking the meal that overwhelms you, try buying prepared, or nearly prepared, foods at the grocery store occasionally. Just make sure they are healthy and that you -aren't spending all your money on short--term convenience.

Clothes and furnishings

Children's clothes and toys. Even if -you're a very careful spender, you might find yourself splurging on your kids. You love them. You want the best for them. Maybe buying things for them makes you feel like a better parent. Maybe it gives you a sense of control. Maybe it makes you feel better about not having enough time with them. Maybe you buy things for your children in order to answer one of your own needs or to fulfill your own dreams—that you never had enough money growing up to get what you wanted as a kid. Or you want your kid to be cool because you -weren't. Perhaps the only reason you indulge your children is because you want to (temporarily, it turns out) silence the endless begging and pleading. Maybe you are caught in the idea that more is better and have a misguided sense that the more things you give your kids the more you love them. -There's an endless supply of cute clothes, shoes, and toys out there. Something is always on sale. The best way to control spending on your children is to stay out of the stores. Period. -Don't buy for your -child's future sizes or tastes. You never know how fast -she'll grow or how his taste will evolve. Wait until he or she gets there. And when they do, I guarantee -there'll be another bargain and another adorable outfit waiting just for you! Solicit hand--me--downs from friends and family and shop secondhand stores when a need arises. Kids grow so quickly that there are often some lightly used garments that barely made it out of the dresser.

Gifts. I'm all for gifts when they are unique or useful and inspired. What I -can't stand is gift giving for the sake of it. If you have the kind of relationship with your friends and family where they know what your financial situation is, then it is perfectly acceptable to substitute a thoughtful, handwritten card for a birthday or holiday gift. It really is the thought that counts! If you -can't keep your gifts appropriate to your wallet, -don't give anything at all. If the holidays are an over--the--top gift exchange, propose that only children receive gifts, or implement a Secret Santa drawing, where each family member chooses a name out of a hat and gives only to that person.

Big-ticket items (electronics, home improvements)

I am sorry, but if you are serious about saving money, you just -don't need a flat--screen TV. Nor does your thirteen--year--old son need the latest iPod, laptop, or cell phone. Yes, these luxuries improve your quality of life, but I question whether they improve it significantly. Put differently, is the sticker price worth the cost to you and your family? You can watch the same programming on a lesser TV. You can listen to the same music on a less--expensive MP3 player. -Don't be an early adopter. Wait until the digital camera you want is cheaper. TVs get less expensive every year. All of these items come with a cost to you and your -family's financial stability.

Home improvements can be necessary, like a new roof, or optional, like landscaping or renovating. Renovating costs add up fast, so keep in mind a basic rule of renovation. Take what the contractor tells you, then assume it will take double the time and double the budget—it's a law of the universe. Stick to necessary changes, avoid financing any renovation through your credit cards, and stay within your budget. In the excitement of improving your home, -it's easy to overcapitalize. Get some solid advice and -don't lose your head. Set a budget, look your contractor in the eye, tell him the figure, and—come hell or high water—stick to it. Even if it means some part of your initial project has to wait till next year.

Grocery bills

We'll talk about clearing the clutter in your diet in the next chapter. For now, all I ask is that you -don't waste money on anything that promises to make you thin. Invest in a long and healthy life, -don't splurge on the easy, empty, quick--fix promises that -you're bombarded with every day. Instead, take the time to plan meals that truly nourish and sustain your family.

Small expenses (lunch, coffee, movies, magazines)

Little luxuries are often the most painless cutbacks to make. But -there's no point in making these sacrifices if you -don't end up with the savings to show for it. If you decide to eliminate your daily latte, then put aside the cost of however many lattes you used to have and make weekly or monthly deposits in a savings account or a "drip" fund, stock funds that often let you make investments of as low as ten dollars. (Drip—what better name for a fund holding your coffee savings?)

No real bargains

Face fears

Clearing your debt—just like clearing any clutter that stands between you and the life you want—should be a priority. Make it one. Keeping your spending secret from your partner is another form of denial. You think if your little gambling habit or shopping problem is never acknowledged, then it -doesn't exist. Wrong! The longer you deceive your partner, the harder it will be to restore trust. Shame is hard to endure, but the damage that dishonesty wreaks on a relationship is far worse. Cut your losses and clean up your mess sooner rather than later.

Assess your risk endurance

Plan for unforeseen circumstances

You could lose your job. Your home might burn down. You could be in a severe car accident. A family member may become suddenly ill. You will most certainly die. Thinking through these possibilities -isn't doomsaying, nor does talking about misfortunes cause them to occur. Dispense with the superstition and be realistic. You need to protect yourself and your loved ones from financial ruin if the unexpected occurs.

If -you're the primary breadwinner for your household, consider how long it might take you to find a job. If it will take you six months, then how much money do you need to have readily available in a money market or other accessible bank account? You should try to have enough money to cover six months of living expenses. If you are self--employed, you need to think about disability insurance. If you think you -don't need it because -you're in perfect health, think again. According to the American Council of Life Insurers, nearly one--third of all Americans will suffer a serious disability between the ages of thirty--five and sixty--five. And as for life insurance, if your untimely death would put your family in dire straits, -don't live in denial. Take care of them. By all means, leave a will. An estate planner can help you make sure your assets -aren't tied up in probate while your loved ones live on bread and water. And be sure to update these policies if you marry, divorce, have children, or remarry. I know -it's hard to contemplate these hardships, but -don't let your emotions clutter your priorities. If you care about the people closest to you, -you'll spare them cleaning up your mess when -you're incapacitated or, you know, dead.

Celebrate successes

And then -there's the stuff ...

Files

Tax stuff

If you want to check the official word on this, read what Uncle Sam has to say at the website of the Internal Revenue Service. Download Publication No. 552 at www.irs.gov for complete details of what to keep and what you can let go of to keep the tax man happy.

Unopened mail

Create a vision for the space where you handle your finances. There should be an inbox for bills to be paid and whatever supplies you need to pay them (computer or checkbook, envelopes, and stamps).

Overcome obstacles that prevent you from doing paperwork. Come clean with yourself and your partner and prepare to move forward.

Commit time, even if -it's only twenty minutes during which you sort and shred every day. Just make sure you prioritize your current paperwork. Handle new papers first, then spend leftover time dealing with the old.

Communicate with your partner about your shared vision for managing your finances. If you -aren't both committed, you -won't succeed.

Set boundaries. Live within your means. If you tend to overspend, give yourself a twenty--four--hour cooling--off period before committing to a purchase.

Make changes. Only by changing the role stuff plays in your life will you be able to stop buying more things, let go of the clutter, and find a financial balance that makes sense for the life you want.

Live in the present, but set aside funds for the future as soon as a paycheck comes in so you can live with the confidence that -you'll continue to enjoy life.

Face fears. Owning up to your money troubles is the first step toward solving them. If you ignore debt, it gets worse fast.

Celebrate successes. As you simplify your finances, you will feel more relaxed and secure. You work hard for your money. Enjoy knowing that -you're making the most of it.

From ENOUGH ALREADY! by Peter Walsh. Copyright © 2009 by Peter Walsh Design, Inc. Reprinted by permission of Free Press, a Division of Simon & Schuster, Inc, NY.