Have you ever had trouble solving a money problem? Maybe you pay bills late, can’t knock your credit card balance down, or are chronically short on cash. It’s frustrating.

But often, someone else can look at the problem and quickly point out solutions. Why is that?  

We’re not looking at ourselves objectively. Outsiders are better at seeing what’s going on.

To remedy this, pretend a friend truly wants your honest opinion. What do you do to help?

Describe the situation

Start by describing the situation. Write down the problem you’re trying to solve, including relevant details.

So you might have:

I’m always short of cash. I run out of money long before payday.

Now ask yourself the hard question: why.  You might be tempted to answer, “I don’t know” or give up in frustration, but don’t. Instead, pretend you’re helping that friend. What would you ask them if they didn’t know why?

Probably something like “What are you spending your money on?”, right?  Or maybe “How much are you  short?”

Drill down until you come up with an explanation. For example, if you take home $1000 each payday and are out of money 5 days before the next payday, you might discover that you’re spending too much on eating out.

Go deeper

In this case, “eating out” answers what you’re spending the money on, but it doesn’t really explain why. So go deeper to figure  out what triggers the overspending.

When do you eat out? What were you doing right before that? How were you feeling? Who were you with?

The real reason is often hidden behind questions like those. (For example, I typically overspend on eating out when I’m bored.)

Suggest alternatives

Now that you’ve been able to look at things objectively, give yourself the same advice you’d give a good friend who asked for help. Suggest alternatives.

In the eating out example, you could tell yourself to exercise or read a book instead when you get bored.

Then follow your own advice. You’ll eliminate that issue by seeing more objectively — and taking action.