The Hidden Reasons You’re Struggling with Money
Most people struggle with money, not because they don’t earn enough, but because of hidden financial traps. Here’s how to escape them for good.
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When I first thought about why people struggle with money, I wondered how to start this post.
Should I begin with statistics?
Would that truly resonate with someone facing financial struggles?
For me, the answer was no.
Numbers alone wouldn’t connect with me—I’d relate more to personal experiences.
That’s why I decided to start with my own story—what I saw in my family, especially with my parents.
A quick side note: These experiences are one of the reasons I became passionate about talking about personal finance, especially for women.
When the Berlin Wall fell, my parents were in their early forties. They suddenly had to adapt to a new economic system with all its financial challenges. Later, they took out a loan to build a house, but with job losses and unstable income, their debt kept growing.
Another issue was that my father handled everything alone, feeling overwhelmed—until my mother became ill. That’s when my siblings and I fully realized the financial difficulties they were facing. We stepped in—not by giving them money but by offering support. We helped organize their finances and created a plan together. But most importantly, we learned to talk openly about money.
I know financial problems can feel like a burden you don’t want to talk about, and that’s okay.
But remember: There is no shame in financial struggles. They don’t define who you are. You are worthy.
Through my experiences, I’ve come to understand the deeper reasons why people struggle with money.
Let’s uncover them together—and more importantly, let’s turn them into strategies to break the cycle.
The 5 Most Common Reasons People Struggle with Money
1. Lack of Financial Education
Sometimes, I want to blame the system for why people struggle with money. We leave school knowing so much—yet almost nothing about personal finance. No one teaches us how to budget, invest, or manage debt.
Unfortunately, most people never learn these basics later in life either.
For my parents, it was even harder. They had to transition from a communist system to a capitalist one, facing entirely new financial challenges.
But instead of blaming the system—because we can’t change it—I believe it’s on us to take responsibility and start learning.
And the good news?
It’s never too late. If you’re struggling financially, start educating yourself. There’s nothing to lose and so much to gain.
I only wish I could have taught this to my parents earlier.
Quick Tip: Start with the basics—budgeting, saving, and investing. Before making big financial changes, focus on building a simple plan that helps you manage your money wisely.
2. Emotional Spending & Lifestyle Inflation
Many people struggle with money because they spend based on emotions rather than needs. Whether it’s stress, boredom, or the pressure to keep up with others, emotional spending can quickly lead to overspending and debt.
Social media and lifestyle inflation make it even harder to resist. Every day, we see others upgrading their homes, wardrobes, and vacations.
The more we earn, the more we feel the need to spend—even when it’s not necessary.
At first, these purchases feel good. But over time, they create financial stress, leaving people stuck in a cycle of spending and regret. This is one of the biggest reasons why people struggle with money.
To be honest, I’ve been there too. I used to buy things just to feel better at the moment. But when I started budgeting and planning my expenses in advance, something changed.
I gave myself an allowance for guilt-free spending, so I didn’t feel restricted.
But more importantly, I realized I didn’t need to buy things to feel happy.
Instead, I focused on my long-term goals and the life I truly wanted.
Suddenly, the pressure to spend disappeared.
How to Control Emotional Spending
If emotional spending is holding you back, try these steps:
Create a Simple Budget – Plan your expenses in advance and set limits for personal spending.
Differentiate Needs vs. Wants – Ask yourself: Do I really need this, or is it just an impulse?
Set Financial Boundaries – Avoid tempting situations, like browsing online stores when bored.
Find Other Ways to Feel Good – Instead of shopping, try activities that bring lasting happiness, like exercising, journaling, or connecting with loved ones.
Stay Focused on Your Goals – Remind yourself of what truly matters—financial security, freedom, and peace of mind
Breaking free from emotional spending isn’t about never buying anything fun—it’s about spending with intention.
Once you align your money with your priorities, the need to spend just to feel good fades away.
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3. Living Paycheck to Paycheck
Many believe that earning more money is the key to financial security.
But the truth is, income alone doesn’t determine financial success—what matters is how much you keep.
I saw this firsthand with my parents. Their income grew over time, yet the money always seemed to disappear just as quickly.
That’s when I realized: it’s not just about earning more—it’s about managing money wisely.
This is a big reason why people struggle with money.
Some people earn high salaries but can’t save a dime, while others with modest incomes manage to build financial security.
The difference? Daily money habits.
Small habits—like not saving first, overspending, or relying on debt—can keep people stuck in the paycheck-to-paycheck cycle, no matter how much they earn.
How to Break the Cycle
The good news? A few simple changes can make a big difference:
Automate Your Savings – Set up an automatic transfer to your savings account each month, so you save without thinking about it.
Pay Yourself First – Before spending on anything else, save a portion of your income. Even small amounts add up over time.
Build an Emergency Fund – Having savings for unexpected expenses prevents financial stress and reliance on credit.
The key isn’t just earning more—it’s building smart money habits that help you keep more of what you earn.
With small, intentional changes, financial security becomes possible—no matter your income level.
4. Debt & High-Interest Payments
One of the biggest reasons why people struggle with money is debt—especially credit cards, loans, and other high-interest borrowing.
It can feel like a never-ending cycle, making it hard to build real financial security.
To continue my parents’ journey, I can say this with certainty: debt was their biggest obstacle to financial freedom.
Their journey has been long and difficult—and it’s still not over. I often wish I could have helped them sooner.
But watching their struggles taught me a powerful lesson:
💡 Debt can delay financial freedom for years—unless you take control.
It also sparked my passion for helping women with their finances, so they never have to feel trapped or dependent on anyone—especially not a husband or someone else.
Money isn’t just a “men’s topic.”
Every woman deserves financial independence.
How to Pay Off Debt Faster
If debt is holding you back, here are two proven strategies to break free:
The Debt Snowball Method – Pay off your smallest debt first while making minimum payments on the rest. Once it’s gone, roll that payment into the next debt. This builds momentum and keeps you motivated.
The Debt Avalanche Method – Focus on paying off the debt with the highest interest rate first, saving you the most money in the long run.
Both methods work—choose the one that fits your mindset and financial situation best.
Debt doesn’t have to control your life. By tackling it step by step, you can move toward financial freedom—without feeling overwhelmed.
The sooner you start, the sooner you can stop struggling with money and start building real wealth.
5. No Clear Financial Goals
Without a clear goal, money tends to disappear. Many people spend without a plan, hoping they’ll save “what’s left” at the end of the month—but often, nothing is left.
I’ve learned that setting financial goals isn’t just about the numbers. It gives purpose and motivation, even when things feel tough.
When I know exactly what I’m working toward, I’m more focused and less tempted to spend mindlessly.
How to Fix It: Set One SMART Money Goal Today
A SMART goal is:
✔ Specific – Know exactly what you want (e.g., save €5,000 for an emergency fund).
✔ Measurable – Track your progress.
✔ Achievable – Set a goal that fits your income.
✔ Relevant – Make it meaningful to you.
✔ Time-bound – Set a deadline to stay accountable.
💡 Quick Action: Write down one financial goal today and break it into small, manageable steps.
How to Break the Cycle and Build Financial Stability
Struggling with money doesn’t have to be permanent. Here’s how you can shift from financial stress to stability.
Step 1: Awareness – Identify Your Biggest Money Block
Ask yourself: What’s my biggest financial challenge right now?
Take time to track your spending or journal about your money habits for a month. You might be surprised by what you discover. Awareness is the first step toward change.
Step 2: Create a Simple, No-Stress Money Plan
Complicated budgets don’t work for most people.
Instead, try the 50/30/20 Rule:
🔹 50% – Needs (rent, food, bills)
🔹 30% – Wants (fun, travel, shopping)
🔹 20% – Savings & debt repayment
💡 Quick Action: Automate your savings so money goes to your savings account before you have a chance to spend it.
Step 3: Increase Your Financial Knowledge
The more you understand about money, the more confident you become. Here’s where to start:
📚 Read: The Effortless Wallet (my Substack!), Personal Finance Economics by
📊 Use Tools: YNAB, Mint, or a simple Google Sheet to track spending.
Step 4: Take One Small Action Today
Big financial changes start with small steps.
Here’s one you can do right now:
💡 Quick Action: Set up an automatic savings transfer for any amount—even €10 per month.
Your Path to Financial Freedom Starts Now
You’re not stuck. No matter your financial situation, small, consistent actions will change your future.
💬 What’s one money habit you’d like to improve? Share in the comments—I’d love to hear from you!
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