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When a Friend or Family Member is in Debt

Dealing with debt can be very difficult, and this isn’t just true if you’re the one in debt. It can also be very tough to see someone you care about struggle with money troubles. High levels of debt can cause incredible stress, which can make it tough to eat, sleep, and focus on anything other than bills and creditors.

Here are some tips for what you can do if someone you love has a serious debt problem.

Look for Warning Signs

Sometimes it can be difficult to tell when someone is struggling with their finances. However, there are a few signs that may reveal if someone is having debt troubles. These signs include:

  • If they seem anxious or depressed
    • Debt can be stressful, and it can make it difficult to sleep well, eat a healthy diet, and exercise. This will affect nearly every aspect of a person’s life and could cause anxiety and depression
  • If they are socializing less and talking about their life less
    • If your loved one was formerly very social and willing to talk about their life, and now they’re more withdrawn, they could be hiding something or feeling down due to debt troubles
  • If they seem to be living above their means
    • If you see that your friend always has the latest and greatest, but you doubt that they have the income to match, they could be spending more than they earn
  • If they’ve asked you to lend them some money
    • If someone asks you to lend them money, they are likely having debt troubles
  • If they have had debt in the past
    • Debt issues can be very tough to recover from. If you know your loved one has had trouble with their finances in the past, recognize that they could still be dealing with these issues

While these signs don’t automatically mean that a person is having debt troubles, they could certainly be warning signs of serious money issues. If a loved one is displaying any of these signs, consider having a considerate talk with them.

Talk to Them

Even in good times, many people do not like to talk about money, finances, and debt. If a person is struggling, they’re even less likely to be open to a conversation. That’s why it’s so important to approach this situation with empathy and openness. This isn’t the time to judge your loved one or lecture them. Instead, approach them as a helpful friend and show compassion. Don’t pry. Only ask about relevant details that will help you figure out how to help.

You may not even want to offer explicit help. Sometimes just knowing that you have someone supportive to talk to is all that a person struggling with debt needs.

Let Them Know They’re Not Alone

Many, many people struggle with debt. There are a lot of people who need help with their finances, struggling with debt doesn’t mean that you are a bad person, and asking for help doesn’t mean you’re weak. Make sure your loved one knows this.

Help Them Find Help

After you’ve had a conversation with your loved one, ask them if there is anything you can do to help them. They might need some assistance in making a budget or some advice on how to best track their spending. They may not understand the interest rates on their debt or they could feel uncomfortable talking with their creditors. Give them any tips you can and offer them the support that they need. Let them know that no one has it all figured out and that you’re learning every day too, just like everyone else.

You can also help your friend get in touch with a licensed financial professional and you can even offer to go with them to the appointment if they would like some additional support. There are a lot of resources out there to help people who are having money troubles.

Resist the Urge to Lend Large Sums of Money

You may want to help your loved one but, in most cases, it’s a good idea to avoid lending someone a large sum of money to help them with their debt problem. First of all, this is only a temporary solution that doesn’t address the root causes of their debt. It also could create a situation where money could come between the two of you, and that can seriously harm your relationship. Finally, many people get into debt troubles themselves when they try to bail out friends or family members. You don’t want this to happen to you.

Instead of lending or giving your loved one money, help them improve their situation by steering them in the right direction and helping them find a trusted and licensed financial professional.