By Joy Liu

A lot of my clients start the financial training process with thinking that their money troubles are solely based on their lack of self-control and sticking to their budget. While we can all do a better job at managing our spending habits, there may be other macro problems that are preventing us from getting ahead, financially.

Here are five things that could be holding you back, mama, and how to fix them.

1. Goals aren't well-defined

Sometimes, we get so caught up in the hamster wheel of life, we forget to ask ourselves what all of this hard work is even for. When you're so busy reacting to the needs and demands of others, then of course, it would be hard to refuse the extra glass of wine at dinner, click "purchase" on Amazon, and order take out for dinner.

You're much more likely to change your day-to-day habits when you have a specific goal that represents something you truly want for yourself.

Below are some examples of goals that I hear from clients. Guess who is reaching their goals faster? The ones with goals they feel obligated to have? Or the ones that match their personal values and desires?

Non-specific financial goals:

  • Be a real adult
  • Save more money
  • Pay off credit card debt
  • Pay off student loans
  • Max out retirement

Motivating financial goals:

  • Save a $10,000 emergency fund so you have the freedom to leave a job you hate
  • Save $1,000 a month into your "Move Out Fund" so you can leave your parent's house and know you can afford to pay rent on your own
  • Save $5,000 so you can take 6 months off of work to hike the Appalachian Trail

2. You aren't making enough money

There are only so many ways you can reduce your expenses and cost cut . Sometimes, people are in debt simply because they do not earn enough to maintain their quality of life. So, how do you figure out what you have to earn to get financially fit and live your best life?


Expenses + Debt Payments/Savings Goals = Total Net Income

Total Net Income Need / .65 = Total Gross Income

Total Gross Income x 12 = Target Annual Salary


$2,500 + $750 = $3,250

$3,250 / .65 = $5,000

$5,000 x 12 = $60,000 - This person would need to earn $60,000 a year to maintain their lifestyle

Doing the math and figuring out exactly what you need to make will make it tremendously easier to ask for the raise, apply for the new higher paying job, or charge a higher freelancer rate.

3. Contributing too much to your 401(k)

The most generic financial advice out there from "financial experts" and older generations is to max out your retirement contributions. The problem with that advice is that is assumes that everyone has achieved the basic financial stepping blocks of having an emergency fund and staying out of high interest debt.

In reality, only 39% of Americans have enough saved to cover a $1,000 emergency and the average American has a credit card balance of $6,375 . As a result, one-third of Americans have had to borrow against their 401(k)s to retroactively address those other issues.

Too often, I've seen many type-A clients who are contributing 10% of their gross income to their 401(k), but don't know why they are having a hard time staying out of credit card debt.

Because you can generally count on your investments to earn 6%-8% over time, it doesn't make sense to invest in retirement if you have credit card debt that is 15%-25% in interest.

4. Forgetting to financially prepare for a growing family

Whether you decide on adding either a pet or a baby to the family , there will be more financial implications than we might think in the moment. I've had many clients start the process with me with credit card debt that stemmed from unplanned vet bills, kids' friends' birthday gifts, summer camp, etc.

On average, you can count on a pet costing you between $200-$300 a month depending on the level of care the dog needs. Yes, some months, you are only buying a $25 bag of food, but then other times, you are having to pay to board the dog or an expensive vet bill. Cats may be less expensive, depending on their health.

If you want to be proactive in preparing for this future expense, I recommend having a separate pet savings account and contributing $200-$300 every month. This will allow you to practice this expense, make room for it in your budget and lifestyle, as well as save for a lump sum of money for any upfront expenses like adoption fees and supplies.

For babies, you can count on them adding at least $1,000 a month to your family expenses. When they are young, it is for medical costs, diapers, clothes and childcare . When they get older, it is for school lunch, extracurriculars, dentist visits, friend's birthdays, cars, and college savings.

I recommend clients prepare for having a baby in the same way as pets. Start a baby savings account and work on saving $1,000 a month so by the time baby comes, they will have already parted with that expense in their budgets.

5. Feeling emotionally drained by debt

When you're in debt , it is a natural tendency to want to do everything you can to pay it off as fast as possible. This is the way to true financial freedom, right? Not exactly.

Spending all of your time and energy throwing any extra money at debt is draining. This method doesn't develop sustainable habits or systems to prevent you from getting back into debt again because it doesn't force you to form a more positive relationship with money. It constantly reinforces the script that you are bad with money and each payment to the credit card is a punishment for the poor financial choices you have made in the past.

Just like extreme fad diets cause a yo-yo effect on your weight, aggressively paying off debt without saving any cash can also cause you to burnout and go right back into your old spending habits again.

Instead, I encourage clients to stop wasting energy on beating themselves up over having debt. A more productive and positive way of approaching it is to work on saving an emergency fund to prevent yourself from going back into debt in the event of an emergency and devise an intentional plan around sustainably paying off the debt over time.

Psychologically, people feel better and more powerful with an increasing bank balance than over a shrinking debt balance, and both have the same positive effect on your overall net worth.

Originally posted on Financial Gym .

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