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Assisting Friends & Family With Debt

Assisting friends and family with debt can be one of the hardest things.  Many of us have been there, a friend or family member comes to you for help with a loan, you look at them and think but how did it get to this.  How does someone who seemed to be in complete control of their lives get themselves into financial trouble?  Our you are thinking; well they must be recklessly spending money.  Your first instinct is to offer advice on how to budget and how to fix the problem when actually what they need is your support. Money can be a very sensitive and personal issue for many people. It’s important to remain unbiased and non-judgmental so the other person feels comfortable opening up to you about their money problems and not ashamed of their debt.

We stumbled upon this TED talk; what an eyeopener, it really made us relook at our perspective on what people in debt might be going through.

Not everyone starts off on the right foot when it comes to personal finance, it is easy for friends and family to end up with too much debt. People get into debt for all kinds of reasons! Sometimes it’s through mindless spending and not being careful with money, but it can also be because of financial emergencies, business problems or other circumstances beyond their control.

Approximately 1 in 5 people will seek out help with their debt problems. It often takes them hitting a ‘tipping point’ where something happens that makes things worse (such as an emergency expense or sudden change in circumstances). It’s at this point where the financial reality finally hits home.

If you suspect that your loved one may be in debt, keep an eye out for these 10 telltale signs:

  1. They’ve been in debt in the past. Debt is something that can be very difficult to fully escape from, especially if they had it at a young age
  2. They’ve had a recent life event that has resulted in a loss of income. Examples are childbirth, being made redundant, illness, divorce or bereavement
  3. They’re living beyond their means or overspending. They always seem to have the latest ‘must have’ items although they do not have the income to cover this
  4. They seem anxious, withdrawn or depressed. They’re not as eager to socialize as much and can seem distracted with their own thoughts
  5. They may seem more secretive and avoid talking about finances
  6. They’ve changed their spending habits, either by reducing spending (e.g. going on fewer holidays or eating out less) or overspending (spending without a plan for repayment e.g. putting luxury items on credit)
  7. They regularly go into their overdrafts or take out further credit to cover monthly bills
  8. They seem tired or are having trouble sleeping
  9. Their weight has increased suddenly. When dealing with stress, we release a hormone called cortisol, which can result in the body storing more fat.
  10. Their weight has decreased suddenly. Anxiety brought on by stress over debt can cause a person to lose their appetite.

These symptoms may seem easy to spot. However, a person in debt can often feel a great deal of shame, and a big part of feeling ashamed is learning how to conceal the tell-tale signs that there’s a problem.

There’s rarely one, clearly visible, tipping point that makes a person struggle with debt. Rather, it’s often a mix of several, smaller symptoms.

So now that you’ve identified some of the tell-tale signs of a debt problem, let’s think about how you could give your loved one the support they need

Talking about money

  • Only ask them about relevant information that you need to know in order to work out how to help them. Avoid prying into irrelevant personal details.
  • Put yourself in their shoes and show compassion for the situation they’re in.
  • Accept the person for who they are and don’t try to change them.
  • Let them know there is support available for them.

Find the right support

It can be confusing and stressful to work out where to go when you need help. The greatest assistance you can give your friend or family member is to help them find the right support.

Debt Counselling Could Be The Solution

Did you know that your loved one could legally reduce their debt repayments by up to 60% by entering into debt counselling?  The stress and depression that is caused by excessive debt could be eliminated by knowing they have an easy to follow plan to get them through.  Contact one of our consultants for a free, confidential assessment to find out if you qualify.


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