4 hard truths about money I've learned through coaching over 100 clients (2024)

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• I've worked with over 100 clients as a money coach, and many people face the same problems budgeting.
• It can take multiple years to save up for an emergency fund — you should treat it as a long-term goal.
• Many of the biggest budgeting problems are rooted in complex emotions brought on by stress and anxiety.

As a money coach, I help my clients budget, make a sustainable financial plan to save or pay off debt, and work on their relationship with their finances.

After working with over 100 clients, there are four hard truths I tell my clients about managing money.

1. Emergency funds are important — and they take time to reach

There's a lot of advice around planning your emergency fund from financial advisors, but very rarely do we hear about realistic timelines to achieve goals like this.

A three-month emergency fund — the minimum that most financial planners recommend — should have your bare necessity expenses for the month (housing, utilities, transportation, and food) multiplied by three. For example, let's say this is $8,000.

For some of my clients, when we factor in their income and monthly expenses, they may only have $250 per month to save for their emergency fund. That $8,000 divided by $250 is 32 months to achieve their full three-month emergency fund.

Then we add in things like paying off debt or saving for that trip on top of your emergency fund, and it can all realistically take months to years to accomplish because of limitations due to expenses and income — and this is perfectly okay and normal for the majority of people.

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2. Overspending is typically emotional spending

Many of my clients overspend due to experiencing uncomfortable emotions or negative narratives associated with money scarcity.

When we're stressed, overwhelmed, tired, or sad, some people turn to shopping as a way to find relief and get a quick dopamine hit.

For some of my clients, money was a scarce resource during their upbringing and wasn't available for them to buy toys, get the clothes they wanted, or go out with friends.

They weren't rewarded when they accomplished something — they had to fight and prove that a purchase was worth the money and often experienced spending lectures from their parents.

Phrases like "No, you can't have that" and "Why should we spend that much money on you?" are statements that my clients still hold onto today when making spending decisions.

It's common for them to distance themselves from scarcity as an adult by spending on whatever they like, even if it hurts their budgets or savings goals.

This doesn't mean you are "bad" with money. You just need to understand your emotional triggers that lead to overspending.

3. You can't implement a budget without working on your money avoidance habits first

Do you find yourself ignoring your monthly bank statements, shutting down during money conversations with your partner or friends, or freezing up every time an unexpected expense comes your way?

Known as money avoidance, when we ignore managing our finances at all costs because it's too emotionally painful, it's a money disorder. Money avoidance keeps people stuck in a cycle of anxiety, doing the same unhelpful things with their money.

For a lot of my clients, money just feels unsafe to engage with. Before we can implement a budget or talk about debt repayment strategies, I need to give them space to reflect and understand why they feel so overwhelmed and scared to confront their finances.

This often results in reliving some painful money memories, conflicts they witnessed because of money, and dissecting confusing money behaviors from their caregivers growing up.

So before you try to implement strategy and a new spreadsheet, it's important to recognize what emotional and psychological factors might get in your way of being able to take action and stick with a financial plan.

4. No one likes to budget because they consistently make 2 mistakes

Mistake No. 1 is struggling to accurately estimate how much money you need to live your life and building a restrictive budget that ends up failing.

To fix this, I always recommend conducting a three-month financial audit of your bank and credit card statements to find exactly how much you're spending (on average) on things like eating out, groceries, shopping, personal care, and social activities.

Then you can create a budget accordingly with more realistic numbers so that you won't end up overspending.

The second mistake is not implementing changes outside of your budgeting app or spreadsheet.

Examples of these changes could look like re-arranging your bank account setup to make it easier to budget (e.g., creating multiple savings accounts for multiple savings goals) or making an effort to improve your spending habits so that you can stick to your budget.

It's one thing to see numbers on your budgeting app or spreadsheet, but it does require action on your part to put some changes in place to be able to succeed with it.