How to Stop Buying a Life That Isn't Yours | Hanna Horvath, CFP®

Hanna Horvath (0:00)

You need to understand your values in order to use money to live the life you want to live. And a lot of people haven't done this. So if you have not thought through how you want to live your life, how money can help you with that, what will inevitably happen is somebody else will make that decision for you.

Tyler Gardner (0:17)

Hello, friends. This is Tyler Gardner welcoming you to another episode of Your Money Guide on the Side, where it is my job to simplify what seems complex, add nuance to what seems simple, and learn from and alongside some of the brightest minds in money, finance and investing. So let's get started and get you one step closer to where you need to be. Today's guest is Hanna Horvath, a certified financial planner who helps people understand why they make the money decisions they make. I was first drawn to Hanna because she clearly has the expertise, she's a CFP, but she also left traditional financial planning because she didn't think money or personal finance was as simple as telling someone they had a 94% chance of being fine in retirement. After years of watching smart people struggle with simple financial advice, she developed a three forces framework revealing how internal psychology, social comparison, and exploitative systems shape every dollar you spend. Through her newsletter, Your Brain on Money, Hanna teaches readers that their money problems aren't personal failures, but predictable responses to forces most people never even see. So she combines financial expertise with behavioral psychology to create strategies that actually work with your brain, not against it. In this episode, we'll address why enough may not be as easy to define as we think, why making our lives easier and easier through money may actually be contributing to a new sense of isolation, and we'll even get into a practical step-by-step system to figure out what the next phase of your money playbook actually should look like. This is a conversation about the forces operating beneath the surface and how to start making decisions that actually align with the life you want to build. I am thrilled to offer you this in-depth and nuanced conversation about money and psychology with Hanna Horvath.

Your story is very similar, I believe, to mine. Let's start with this, you left traditional finance. That already drew me to want to talk to you. I'm like, all right, another one joins the light side. You left traditional finance planning to focus, I believe, more heavily on the psychology of money and helping people think through that side of money. What were you seeing in that world, the traditional world that made you realize something fundamental was missing?

Hanna Horvath (2:58)

Yeah. I would say the first thing is, I felt like just in my career, I was just regurgitating the same 10 talking points over and over and over again. I would say the vast majority of people I talked to feel like they're struggling with their money and feel like they're bad with money. We have access to more information than ever before. Information is not the issue. The traditional finance industry is really like the information industry. They're hyper-focused on what facts to tell somebody. I was like, okay, so people have access to all this information and they're still struggling. Clearly, this is not an issue with information. That's when I really started to think about, well, so much of our decision-making is driven by our emotions and ideas and it's behavioral. The traditional financial industry really puts an emphasis on the fact that money is this objective, rational, it's a math, right? Humans are rational actors when really it could not be further from the truth. We're so emotional, money is wrapped up in our sense of self, and so that really got me kind of starting to walk away from like the whole traditional side of things and more into why are we making the financial decisions that we make? And I believe kind of the thesis behind that was like once we understand that why we can then actually change our relationship with money and actually make better money decisions.

Tyler Gardner (4:19)

And did you find that you weren't allowed to do that or did it was somebody telling you you can't have these types of conversations? And I guess like the word that I'm really clinging to that you just use, which I love, is regurgitate. You know, were you were you kind of told to deliver a certain script throughout your time and avoid kind of some of the sideline areas that might have helped people even more?

Hanna Horvath (4:43)

I don't know if it was like allowed or not allowed, but I will say there's like a very heavy emphasis on like this is the playbook. And again, it's almost treating the client or the person you're writing an article for as numbers, right? Or like as like a robot where it's like they're going to come in, they're going to give you the inputs, you give them the outputs, they walk away, everything's amazing. And again, it just kept coming back to like, I'm telling people the correct advice, sound advice, they're nodding their head. I would say most people are quite smart. I mean, especially somebody that's coming to a financial planner, you know, they know these basic facts. So they're nodding, they understand. And then three months later, it's like, okay, what's happening? You know, they're still struggling. They're still in these like, whatever those kind of bad habits are, they're getting them into the situation they are in the first place. And so that's what I'm like, okay, it's like, you can lead a horse to water, right? That's where I got into like, okay, we need to actually sit down and understand all these other factors that are influencing your money decisions. The traditional financial industry, it's like, okay, well, we're not therapists. We don't need to talk about your relationships. We don't need to talk about your early childhood memories. But I would argue you do, because like I said before, your money is so wrapped up in your sense of self. And so if you don't understand your values or what you want money to do for you, it's going to be really hard to kind of change your money habits. The word I like to use is like prescriptive. I feel like traditional financial advice is very prescriptive and is not very focused on these behavioral factors that, you know, surround our money decisions.