You Can’t Solve Financial Problems With Money

Have you ever thought your life would be so much better if only you had more money?‍ People consider their financial problems to be external to themselves. Many of us believe that if we had plenty of money, we could solve all (or most of) our problems.

Have you ever thought your life would be so much better if only you had more money?

People consider their financial problems to be external to themselves. Many of us believe that if we had plenty of money, we could solve all (or most of) our problems.

Money problems aren’t about dollars or numbers, they’re mostly emotional and behavioural problems or challenges.

The truth is, your current financial position (or problem) is a direct reflection, like a mirror of your inner world – that is, your thoughts and beliefs.

What Typically Happens When We Make More Money?

I’ve observed that most people who experience income increases upgrade their lifestyle. If they've got it, they spend it – holidays, wardrobe, new car, or a bigger house, or they find creative ways to get rid of it like unexpected expenses or fines, give it away or lose it with poor financial decisions. Instead of maintaining their previous lifestyle and saving and investing the extra money, they just spend more.

If deep down inside, where you’ve probably never looked before, you unconsciously feel unworthy of money, you will not keep that extra money for long. Trust me!

Money won’t make everything better if you're unhappy on the inside, so working on fixing yourself from the inside out is the solution to your ‘problem’.

Here are some of the things I hear or observe when coaching clients:

  • Using lack of financial knowledge as an excuse to not make money work for them
  • Paying a ‘convenience tax’ because they’re too ‘busy’
  • Justifying emotional spending with: I work hard so I deserve to treat myself
  • Not having clear goals or direction with their money
  • Avoid keeping track of their money
  • Using credit cards to finance their life
  • In denial: don’t know if they’re spending more than they make (there’s never any money left over and I don’t know where it all goes)
  • Spending money on themselves or others to look successful on the outside
  • Anxiety around money so avoid dealing with it
  • Money is serious and stressful and not to be enjoyed
  • Not living up to their full financial potential
  • Underearning despite being talented, experienced, and providing value to others

There is a dualistic nature to money – we have an internal and external relationship with it. Our external relationship is how much income we earn, the balances in our bank accounts and debt accounts, and how much super or retirement assets we’ve accumulated.

Our internal relationship is our ‘money mindset’ which consists of what we believe about our own self-worth to earn it, grow it and retain it. These beliefs (or thinking) cause our emotions and behaviours with money.

Albert Einstein said: “We cannot solve our problems with the same level of thinking that created them.”

It makes sense that we need to examine the dynamics of our thoughts and emotions, if we want to improve our financial outcomes.

Guess what? Even rich people go broke

There’s evidence to show that more money doesn’t automatically solve all financial problems (sorry!). Look at the number of wealthy people who end up broke.

According to the National Endowment for Financial Education, about 70% of lottery winners or recipients of large financial windfalls go bankrupt within a few years.  It’s also common for celebrities and famous athletes to end up bankrupt after earning millions of dollars.

“It’s not about how much money you make, but about how much money you keep.”  Robert Kiyosaki, author of Rich Dad, Poor Dad

What Will Solve Your Financial Problems?

Mastering money requires self-awareness, observation, discipline, and practice.  As well as self-compassion and true forgiveness for your past financial mistakes.

This is all ‘ inner work’ ie. developing the right mindset and behaviours around money, becoming financially literate, and developing healthy money-management skills.

Without these 3 things, you can stay financially stuck — no matter how much money comes your way.

Start Today

If you want to change your financial situation, don’t wait for more money to arrive, the next significant pay rise, finishing a degree, paying off your credit card or mortgage, or next year “when things will be better”.

Instead, develop your attitudes, behaviours, and knowledge around money today. Track your expenses, be conscious of your spending, focus on saving more, learn about wealth creation and money management, and invest your savings in income-generating assets.

Managing our money is as much about managing ourselves.

If you’d like to explore the inner workings and emotional side of your money, visit book a 15 min call with me to find out more.


Karen Eley is a financial coach with more than 20 years’ experience as a financial adviser. Through her business, Women Talking Finance, she helps women to be confident and knowledgeable about all things finance. Karen translates complex financial concepts into simple digestible ideas.

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