Dealing with your debt problems is hard. But it’s also just as hard if you are trying to help someone get out of their own debt struggles.
The truth is, helping our loved ones with their financial difficulties is a common occurrence. In fact, a survey revealed that adults help their loved ones financially especially when it comes to basic necessities. These expenses include groceries, housing expenses, health care costs, etc. And it’s not just the parents helping their adult children. It’s also vice versa.
You might be thinking – but this is a different case. It’s not the same as helping someone with their debt.
Why? Because giving money to help someone pay off their debt is not really a good idea. It will not help our loved ones correct the bad spending behavior or financial habits that led to that debt.
While this is true, you have to remember that it’s not the only way you can help someone with their debt problems. Sometimes, it’s the support and guidance that will help them get over their debt troubles.
So even if you don’t have the money to help them with their debt struggles, you can still help. You just have to figure out what your loved one really needs.
Signs a loved one needs help with debt problems
Before you step in to offer your help, you need to make sure that your loved one is really struggling with their debt issues. There are signs that will tell you if they have a serious problem or not.
If they don’t have any savings
Debt is sometimes caused by our lack of savings. There are those who live from paycheck to paycheck. That means their income is just enough to cover for their usual expenses. Once an emergency happens, like losing a job or getting sick, they borrow money to pay for it. But if you help them get savings, even if it’s just $500, it can really keep them from more debt problems.
If their credit card is always being declined
If your loved one continues to use their credit card and it keeps getting declined, that is an indication that they are not aware of their current balance. Because if they were monitoring their debts, they would avoid using their card to avoid the embarrassment that comes with a declined card. And you also know the situation is worse if your loved one goes through all their cards and these are all declined.
If they keep on opening more lines of credit
If you are seeing signs that your loved ones are struggling with their finances, observe if they keep on borrowing money. Borrowing more debt if they can no longer pay the current one will make their debt problems worse.
If they are working more just to pay for basic necessities
This is also a strong indication that they are struggling to pay off their debts. It has grown too much that they had to increase their income to pay for the things that they need to survive. Their debts have begun eating into their income that it’s no longer enough for them to live on.
If they are not getting a needed medical treatment
If you notice a loved one getting sick and still refuse to get medical treatment, you need to ask them why. Health care is an important expense and should be given priority. But if they are unable to do that, it might be an indication of financial difficulty. They may be struggling with existing medical debt or they may have other debts that are restricting their ability to get proper medical care.
These are the common signs that a loved one is dealing with debt problems. If you want to keep them from making things worse, it may be time for you to intervene.
How to help someone with their debt problems
Now that you know the signs that someone needs help with their debt problems, how can you be of assistance so they can improve their finances?
According to reports, more than 4 out of 10 Americans are worried about their debt levels. With the recession and the crisis that’s happening, this is not surprising. So it shouldn’t surprise you as well if your loved one is already struggling with their debt problems.
What you should be focusing on is how you can help them get out of debt? Here are helpful tips that you can use.
Have a serious conversation about it
This is going to be an awkward conversation. But you have to face it. If you really want to help your loved one, you have to sit with them to discuss their current financial situation.
And make sure you are serious about it. Don’t pass it off as a joke or make fun of the situation. They will not take it seriously if that is your approach. It will be more painful to talk to them seriously about their debt problems but this is what they need. You want them to wake up to what the real situation is. They need to realize that their situation can make them bankrupt. It can take everything they worked hard to achieve – their house and various possessions.
Before you sit and talk to them, you need to prepare for how they will react. Will they become defensive? Or will they be evasive? Will they take your intervention negatively? Don’t feel bad if they get angry. Just be firm that you want to help.
You should also assure them that you will keep your conversation confidential. If you want to discuss it with your spouse, make sure to ask their permission first. Not everyone is comfortable talking about their finances because they feel bad about it. They don’t want other people talking about it behind their backs so make sure you are sensitive enough to respect that.
Set plans for the future
You’re not going to make decisions for your loved ones. But you will help them set plans for their own future. Sometimes, we just need to have someone to guide and support us. We may think that something is good for us but if you ask someone else’s opinion, it turns out to be the opposite. So just stay by their side and give them your honest opinion. If you are close to that person, you should be able to identify the goals that they want to achieve in the future.
But make sure that you get a feel of how much they want you to interfere. Some people don’t like to be told what they should do with their lives. If this is the case, you can make suggestions instead. Or you can ask questions that will make them come to their own conclusions.
The important thing is to make sure that they have plans for the future – and that it’s a realistic one. Give them something to look forward to and motivate them to improve their life.
Create a solution
This is going to be a bit tough to do because almost all debt solutions will require your loved one to make sacrifices. And they may not be excited to do that. But if you’ve gone through the serious conversation and planning for their future, it may be easier to make them choose.
Just like when you were talking about the future, don’t dictate what they should do to solve their problems. Help them research the options that they need. If they are having a hard time deciding, discuss with them the pros and cons of every option. Just like when you talked about their future, you can ask questions that will help them realize the best option for them.
With your help, your loved one should be able to make an informed decision about their debt problems.
Give them support
Finally, you have to give them support no matter what happens. Whether they keep going towards their goal to save their finances or if they falter and fail, you need to be there. You have to cheer them when they reach milestones. And if they stumble or make mistakes, you need to be there to motivate them. You have to encourage them to get back and try to complete everything that they started.
The road towards complete debt freedom is long. And it will be hard for your loved one. There will be temptations and changes in their lives that will make it very hard to keep paying off their debts. But with the support that you will give them, the journey will be bearable.
Sometimes, you don’t even have to do a lot. Maybe you can be there to remind them of their payments. Or help them find alternative ways to find entertainment that will not make them spend anything. You can live the same frugal life that they have to live so they won’t feel so miserable able having to live on less. The little things that you can do to support them will have a huge impact on their ability to solve their debt problems.