Suze Orman
Photo: Marc Royce
Q: I'm a 36-year-old single mother with two children, ages 7 and 12. My finances are out of control. I don't have a lot of debts, but I just can't seem to get above water. It's a vicious cycle: I have bad credit because of my debts, and I can't get a loan to pay off my debts because of my bad credit. I have no money for a rainy day or when the car needs fixing. I just work and pay household bills to keep a roof over my children's heads. There's nothing left to make extra monthly payments, not even $50. I have come to realize that home ownership is a dream that will never come true. Can you help?

A: Do you know that except for your first sentence, there is not one line in your letter that's not full of fear, doubt, shame, confusion, or anger? These are the key internal obstacles to wealth. Even though you may think your financial bottom line determines how you feel about who you are, I'm here to tell you that how you feel about who you are is what really determines your bottom line. Read that last sentence again. Negative emotions will always cause you to spend money you don't have to temporarily fill up that empty space within you. You are a single mother with two children who has somehow managed not to be totally sunk by debt. How many single moms can say that? I think you're doing great—too bad you don't.

Here is what I want you to understand: Figuring out your money is no different from raising kids—you do it one day at a time. For the next month, I want you to write down every cent you spend. Bring that list to bed each night and take a serious look at whether your spending was truly for needs or whether some wants crept in there. If you find a want on your list, write down the emotion you felt when you made the purchase. Did you buy something simply because you were angry that you never have anything to show for your efforts? Before you get out of bed in the morning, take another look and make a mental note of your financial-emotional actions from the day before.

Once you're aware of your patterns, it will be easy to stop spending in the heat of the moment and ask yourself whether you're making an emotional purchase. If you are, you will put the item back on the shelf and instead take the value of that item and put it in an envelope. At the end of the month, I bet you'll be surprised to discover more than the $50 you say you can't find. Please just try this.

The next step is to take that savings and make extra payments on your credit cards. Even paying an additional $20 a month will allow you to eliminate your balance more quickly, which will boost your credit rating.

Ideally, I'd have a quick fix for you, but that's not in the cards. You need to attack the problem day by day, not only thinking about what you really want but writing it down and taking the actions to make it a reality. When your debts are under control, you'll be in a far better position to apply for a mortgage.