One subject arising whenever writers gather to discuss their craft is the mining of life itself for story material. While a vital and important technique, it is important to remember that real human beings are impossibly complex, far too complicated to serve as story characters without major modification. The most complex character in all of western fiction (arguably), Hamlet, is still only 1% as complex as a real human being.
One must remember that there is a unity between character and plot: they are, in essence, two sides of a single coin. Plot is what a character does in a given situation. A plot must empty a character out, give us everything we need to know about the lead, or the story situation hasn't been thought through very well.
In life, it is reasonable to take the position that we are what we do. True, this is not ALL that we are, but what we do is closer to this essence than what we "think" we are, or what others define us as. Everyone knows that we judge each other on our actions, and it is childish to pretend otherwise.
We learn to characterize by formulating a theory of human nature, and then testing it against the people around us--our family and friends. You should be prepared to defend this theory in conversation and literary debate. After all, there are only two basic questions being addressed in all of fiction:
1) What is it to be human?
2) What is the ethical structure of the universe?
Whatever your own theory is, you should understand it from every direction, and be able to apply it to understand your own strengths and weaknesses.
Look at the three major areas of human life: body, mind, and spirit. What does your body say about you? Believe me, it says worlds about your values, discipline, emotional health, habit patterns and more. What does your career say about you? Are you operating at full efficiency there? Do you complain about money troubles, but not do anything about it? Do you dream, but not perform? Or are you working at a job that you would continue to do even if you won the lottery? To me, this is a major sign of an active, healthy intellect--the ability to do for a living that which you would do for free.
What about your relationship with your husband/wife/significant other? To me, this is where you reveal yourself most clearly. You ARE your partner, flipped upside-down and inside out. If you like what you see across the breakfast table from you, great. If not, you have work to do. Remember: whoever you see over there was the best you could do. If you could have gotten someone smarter, handsomer/prettier, emotionally healthier--you would have. So take a hard look. Often, you can learn more from a person's partner than you can from meeting the person.
Viewed in this way, there is a lifetime of study in understanding the people around us, and in understanding ourselves as well. And a lifetime of potential stories in examining how people's flaws and gaps keep them from achieving their full potential. It can be painful to look at this stuff, but the only thing even more painful is being terminally untrue to your own spirit. That, my friends, is a true tragedy. Better the pain of awareness than the agony of self-betrayal. By a long shot.