Hi Reader!

When I first thought about why people struggle with money, I wondered: Should I start with statistics? Would that truly resonate with someone facing financial struggles?

For me, the answer was no.

Numbers alone don’t connect as much as personal experiences.

That’s why I’m starting with my own story.

When the Berlin Wall fell, my parents were in their early forties, suddenly adapting to a new economic system. They took out a loan to build a house, but with job losses and unstable income, their debt grew. My father handled everything alone—until my mother became ill. That’s when my siblings and I fully realized the financial difficulties they faced.

We didn’t give them money—we gave them support. We helped organize their finances and created a plan. But most importantly, we learned to talk openly about money.

I know financial problems can feel like a burden, but remember: There is no shame in financial struggles. They don’t define who you are.

Through my experiences, I’ve identified the five biggest reasons people struggle with money—and, more importantly, how to break the cycle.

1. Lack of Financial Education

We learn so much in school—yet almost nothing about personal finance. No one teaches us how to budget, invest, or manage debt. Many people never learn these basics later in life either.

Instead of blaming the system, we must take responsibility.

The good news? It’s never too late to start learning.

2. Emotional Spending & Lifestyle Inflation

Many people struggle with money because they spend based on emotions rather than needs. Stress, boredom, and social pressure lead to overspending and debt.

At first, these purchases feel good. But over time, they create financial stress, leaving people stuck in a cycle of spending and regret.

How to Control Emotional Spending:

• Create a Simple Budget – Plan expenses in advance.
• Differentiate Needs vs. Wants – Ask yourself: Do I really need this?
• Find Other Ways to Feel Good – Instead of shopping, try exercising, journaling, or connecting with loved ones.

3. Living Paycheck to Paycheck

Many believe earning more money is the key to financial security. But the truth is, it’s not about how much you earn—it’s about how much you keep.

Small habits—like not saving first, overspending, or relying on debt—keep people stuck, no matter their income level.

How to Break the Cycle:

• Automate Your Savings – Transfer a small amount to savings each month.
• Pay Yourself First – Before spending, set aside money for savings.
• Build an Emergency Fund – Even a small cushion prevents financial stress.

4. Debt & High-Interest Payments

Debt—especially credit cards and loans—can feel like a never-ending cycle. It delays financial freedom for years unless you take control.

How to Pay Off Debt Faster:

• Debt Snowball Method – Pay off your smallest debt first, then roll that payment into the next debt.
• Debt Avalanche Method – Pay off the highest-interest debt first to save money.

Debt doesn’t have to control your life. 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 to save “what’s left” at the end of the month—but often, nothing is left.

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.

How to Break the Cycle & Build Financial Stability

Struggling with money doesn’t have to be permanent.

Here’s how you can shift from financial stress to stability:

1. Awareness: Identify your biggest money block. Track your spending or journal about your money habits.
2. Create a Simple Money Plan: Try the 50/30/20 rule—50% for needs, 30% for wants, 20% for savings/debt repayment.
3. Increase Your Financial Knowledge: Read Female Finance (my Substack!) and use money tools like YNAB or Mint.
4. Take One Small Action Today: Set up an automatic savings transfer—even €10 per month makes a difference.

You’re not stuck. No matter your financial situation, small, consistent actions will change your future.

📥 Want to simplify your finances? Download my free Minimalist Money Plan to take control of your money today.

📖 Read the full post on Substack.​

Katja

​

​
​