As a financial counselor, I have the privilege of working with a diverse group of families and businesses, each with their own unique circumstances and backgrounds. It's clear to me that every client comes with their own blend of personality traits and money stories that shape their approach to money management. However, amidst this rich variety, there are several common challenges that financial counseling clients face on their financial journeys.

Here are four common financial challenges that I have found working with clients and their businesses. Maybe you can relate.

1. Credit cards are being used as an emergency fund.

A common indicator of a struggling family or business is a lack of cash reserves. Consequently, credit cards often become a makeshift emergency fund to manage unexpected expenses. Unfortunately, when emergencies do arise (and they will), individuals often exacerbate their financial troubles by accruing even more debt.

An effective debt elimination strategy involves safeguarding yourself against the risk of additional debt. This means maintaining some cash on hand to address unforeseen expenses while you remain focused on becoming debt-free. Even if you come across promotions offering 0% interest for 12 or 18 months, it’s generally wiser to pay in cash and avoid the stress that comes from carrying a credit balance.

2. Student loans are a very serious problem. 

Recent data indicates that families are burdened with an average of over $30,000 in student loan debt. While it's not surprising for financial counselors to encounter clients with substantial student loans, the scale of this issue is even more severe than I had anticipated. Unfortunately, the only viable solution is to actually repay these loans, as student debt is one of the few financial obligations that cannot be discharged through bankruptcy.

If you are contemplating pursuing education after high school, it's essential to do your homework and establish a budget that aligns with what you can afford. After submitting your Free Application for Federal Student Aid (FAFSA), take a close look at the details of your college's financial aid offer. Although the term "award" might suggest the college is offering you "free" money, most financial aid packages typically consist of a combination of grants, scholarships, and, yes, loans.

3. Poor tax planning leads to large tax bills. 

I understand that many people prefer not to dwell on taxes and may even dread the filing process. However, it's concerning the number of clients who have paid professionals to prepare their taxes but have received poor advice. This has caused clients to owe thousands of dollars on their state and federal taxes year after year. Whether you're filing income taxes or seeking assistance in structuring your small business in a tax-efficient manner, obtaining sound advice is invaluable.

As you begin your tax planning, consider your own withholding situation. Did you end up owing money to the IRS, or did you receive a refund? When was the last time you adjusted your IRS Form W-4? If you are a contract employee (1099) or a small business owner, are you estimating your taxes and making timely payments to the IRS? For trustworthy tax guidance and reliable Christian financial advice, I highly recommend consulting with a Certified Kingdom Advisor (CKA).

4. Pets consume more than food and water, they consume financial margin.

The American dream feels incomplete without both a dog and a cat. Nothing brings more consistent joy to a home than the warm greetings from our furry friends at the door, complete with their unwavering smiles. Our clients often feel the same way—their pets are integral members of their families. But the costs associated with owning a pet have become increasingly significant. From annual vaccinations and flea treatments to heart medications, kennel vaccines, specialized foods, beds, toys, and the wear and tear on home and yard, the financial demands are considerable. Pets can easily consume every last bit of financial margin.

As a counselor, discussing pet ownership presents a unique challenge. But pet ownership must be carefully assessed in terms of priorities and affordability. While a $99 adoption fee at a local pet store may seem appealing, the lifelong expenses of caring for a pet can far surpass those of owning a car. If you're a family facing significant debt and struggling to make ends meet, pet ownership may not be a viable option. It’s essential to consider pets within the context of your overall financial well-being and prioritize accordingly.

Our objective in financial counseling is to assist clients in overcoming their financial obstacles. While the setbacks and financial difficulties might feel unique to your situation, it is likely that others have faced similar obstacles. Reach out to a trusted financial counselor today, and see how you can overcome those obstacles one step at a time. A great place to start is a CERTCFC® counselor. You can locate one in your area through the Institute for Christian Financial Health (christianfinancialhealth.com).

About the author: Nate Sargent loves serving at his church with his wife and two children. In his free time, Nate enjoys running, hiking, and woodworking. Learn more about Nate and his financial counseling services through his website, natesargent.com.