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your steps, you still come up $20, $40, or $60 short? It’s upsetting, but most of us feel that way most of the time: a little short, a little panicky, wondering exactly where our money is going.
KAREN’S STORY
    You could tell right away that Karen was an extremely efficient woman. She produced a radio show, ran her household, organized her children’s lives, seemed to have everything under control—your basic superwoman. Except when it came to money.
    I guess it was when Richie’s mother died that he decided we needed to do something special with that money. She left us $25,000, and that was the most we ever had in one lump sum. So Richie wanted us to figure out how to invest it right away, he wanted to keep it safe and sound but have it grow for our future. I think this money meant so much to him because it was the last thing he would get from his mom. I made an appointment with a financial planner a friend recommended, and we did go, right away. He was nice, but he wouldn’t tell us where to invest the money until we filled out a questionnaire covering all our finances, not just about the money we wantedto invest, so we took the forms home. I told Richie I’d fill it out because I handle most of the finances, but it’s still there, sitting on my desk. I get queasy every time I look at it. I have a Visa card with a pretty big balance that Richie doesn’t even know about. So I can’t fill in the part about how much we owe—if I told him, he’d really be angry. And we have a few other unpaid bills, nothing serious, just sometimes we’re a little short and I pay late. It just seems like a big tangled mess, so I keep procrastinating, and now Richie is the one who keeps asking about the forms. It’s been about six months since we got those forms and God only knows how I wish I could just fill them out and send them back, but I can’t. The money? Oh, it’s still in our joint account, except now it’s down, I think to about $22,000.
    In time that $22,000 will inevitably go down to $20,000, then $15,000, and before you know it, it will be gone. Most likely the balance on Karen’s secret credit card will be higher as well. What happened to Karen happens to most of us. We’re afraid to really look at our finances head-on, to see where everything really goes.
    We all work so hard for our money, yet don’t let it work for us because we simply will not deal with it, will not check the amount we spend against the amount we bring in. And not dealing with money is just a different way of dealing with it—badly.
    One of the first things I asked new clients to do was to write down on a piece of paper what they thought they spent each month. If the clients were married or living together, each, without consulting the other, was to write down what they thought their combined household expenses added up to each month. A simple enough question, right? We’ll see.
    WHERE DO YOU THINK YOU STAND TODAY?
    Think carefully, then please write down your own answer: What does it cost you to live each month?
    If you are married or living with someone with whom you share expenses, please ask him or her to write down the answer to the same question.
    I am willing to bet you that after we complete this chapter, you will find that you’re like most people. You’ll find that you do not know.
    How is that possible?
    Most of us believe, or deceive ourselves into believing, that we need about $1,000 to $1,500 a month less than we actually do need to go on living the exact same way we live right now. Surprisingly, this figure seems to vary only a little bit regardless of income levels. If a client writes down that she needs, after taxes, $3,000 a month to live, invariably the truer figure is $4,000. If the client thinks he spends $10,000 a month, the actual figure is closer to $11,500. Where does this month-to-month self-deception lead us? Into financial chaos.
    The reason we don’t know how much it really costs us to live is this: Our