Diet first...then bring in excerise?

If it is only one or the other...Then yes start getting the amount of food you are eating under control first.

Why not start excercising as well?

I had the same exact thought when I read the thread title. If you don't think you can handle both at first, definitely concentrate on cleaning up your diet, getting portions under control etc as diet is 80% of weight loss. Exercise will definitely help you stay within your daily calorie goals though if you can start getting it in (when you log exercise, you earn more calories). Even if you can just start small like going for short walks or doing sit-ups during commercials, parking further away from the store, taking stairs instead of elevator, etc. Every little bit helps!

Sometimes it can be a lot to try to change a whole bunch of habits all at once.

I think starting with food is fine. And within that, I'd even suggest that you focus on just one or two things at first, and then add others over time.

I'd recommend starting with focusing on portion portion control, increasing your water intake, and not going over your daily calorie goal first. Then, when that gets easier, start paying more attention to your carb/fat/protein ratios; and then as that gets more comfortable, start paying more attention to sodium and other macronutrients.

And if you're not quite ready for the "E" word, then start with the "A" word instead. A little bit more "Activity" every day (parking a little farther away from the front door of the store, taking the stairs instead of the elevator, holding your tummy tight at a red light, doing 3 toe-touches in the morning before you shed your jammies. . . .) will start to add up, and isn't quite as scary as "Exercise."

diet is 80% of weight loss

Actually it is 100%. Exercise will have some impact on how much you can eat and allow you to eat a little more and still lose (as compared to not exercising) but the primary reason to exercise is for general health. Weight loss is only one component of fitness. I think it improves attitude, making me feel better about myself, and gives me more incentive to stay on the diet because I feel like my overall condition is improving.

The thing I learned that helped me the most is measuring portions. I use a scale to weigh my meat, and measuring cups/spoons for other things. I measure everything to make sure I'm eating an actual serving size. This has helped so much with training myself to eat better!

edit to fix silly typo