The First Step: Assess Your Situation

Before you can become the ultimate miser, you have to know where you are today and where you want to be. Without a map, you'll make a lot of wrong turns and waste a lot of gas. No one likes to waste gas.

Use Personal Finance Software. I am a Quicken user myself. Have been for over a decade. There are other options out there. Mint, for example, is being purchased by Intuit, makers of Quicken. It is purely web-based, which means you can manage your finances anywhere in the world pretty much. Quicken gives me the visibility I need to see how my spending compares month over month, for example. It lets me know when my bills are due so I don't miss any payments, and it tells me in real-time my Net Worth.

Create a Document Titled "2009" (or whatever year it is). This is your free-flowing list of what your goals for the year will be. For example, one of my goals for 2009 was to pay off a mortgage on a rental property. I set that goal a couple of years ago and reached it a full year ahead of schedule. List your near-term (this year) goals, your intermediate-term (next 3 years) goals, and your long-term (lifetime) goals. I think I need $2 million to comfortably retire. That's a long-term goal. I want to add $5,000 to my IRA. That's a near-term one.

List Your Top 5 Money Wasting Habits. Your list needs to include the manageable habits. If you are addicted to crack rock, leave that off this list. It's probably the dumbest thing you could do, but it's going to be hell to kick the habit, so skip it for now. This list should include those things you know you need to stop doing, and are relatively painless to implement. My Top 5 Money Wasting Habits: 1) eating out without a coupon, 2) leaving the ceiling fan (or light or TV or another energy demon) on when I leave a room, 3) running the dishwasher when it's half empty, 4) letting food expire and go to waste, and 5) talking myself into buying that beautiful BMW in my garage. It's become the bane of my existence and it's gotta go. I must have been drunk the day I talked myself into doing it.

These are the Baby Steps. In other words, if you struggle with these things, well... as my dentist once told me, "This might hurt a bit." You better buckle up.