When my wife and I moved from Connecticut to Florida, we closed a lot of accounts -- everything from cable to utilities, various gym memberships, and a few other things. During this process, we found that I'd been paying $19.99 a month for a gym membership at a national chain that I hadn't visited in years.

It was a relatively small amount of money being drawn directly from our checking account, and I hadn't noticed it was burning about $240 annually for more than one year.

That was a sobering lesson in fiscal irresponsibility. Now, at the start of every year, I do an audit of my finances. Basically, I'm looking to make sure we're saving enough, that we're paying down our debts, and that the money going out makes sense.

Follow your money

Society has moved toward a subscription model for more than just gyms. Many of us pay for streaming services, high-quality news content, and various other services. My list is longer than most because I justify certain services I rarely use -- Hulu being a prime example -- as things I need for work.

That said, I pay for Netflix, Hulu, HBO, DC Universe, Sling, Amazon.com's Prime, the WWE Network, and Xbox Live Gold, and I also have a monthly Massage Envy membership. I also pay for DirecTV and have Disney World, Universal Studios, and SeaWorld passes for me and my son. I don't have a gym membership, since our building has a gym.

In my case, as I examine the list, there's nothing unexpected and nothing that doesn't belong. I've never used DC Universe, but I paid for a year upfront, so I made a note to check my usage when that year ends.

In addition to looking at multiple months of bank statements -- three or four should be enough to catch nearly all recurring charges -- I also looked at my credit card bills just to make sure I'm not missing anything.

A smiling man holds papers in one hand and types with the other on a laptop.

You need to know where your money is going. Image source: Getty Images.

Check your budget

In addition to looking for mistakes or hidden expenses, I also did a basic budget. I looked at how much comes in each month and what our core fixed expenses are: mortgage, two car loans, car insurance, homeowners' association bills in two locations, cable, power at two houses, and a small amount of about-to-be-paid off credit card debt.

Fortunately, we live below our means and cover all of our bills with room to save for short- and long-term goals. In some cases, however, doing even a basic budget can show that your finances are out of whack.

If you're operating at a deficit or even near the edge, it's important to make some big changes. That might mean figuring out how to make more money, or it could mean cutting back. If you don't, and you continue to pay for shortfalls by borrowing, you'll create a hole that continues to get harder to climb out of.

Talk it out and take action

It's easy to cancel a gym membership or drop a streaming service if you're not using them. It's much harder if what you make doesn't cover what you spend. If that happens, you need to take action, which should involve a frank talk with your significant other.

Be honest and decide where you can make changes. Is making more money feasible? Can you drop enough borderline expenses to make a difference?

If you can't, then you need a big change. You might have to move or change jobs if you can land a higher salary. These aren't fun choices, but it's better to know and better to make them now before the problem gets out of hand.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.