May 2, 2024

How to help someone with financial problems

Find out how to help someone with financial problems with these 9 tips meant to create a safe space for friends or family who are struggling financially and emotionally.

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How to help someone with financial problems

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Dealing with a serious financial problem is often a lonely and stressful time in someone’s life. A 2023 Affordability Index by BDO showed that 56% of Canadians find it challenging to discuss their financial issues with friends and family. Many suffer in silence, too ashamed to reach out for help. How should you talk to someone who isn’t doing well financially?

What are the triggers to avoid and the positive words of encouragement you can share that will contribute to someone’s road to recovery?

Here are some tips to help you lay the groundwork for creating a safe space in which your friends and family will feel more comfortable sharing their financial struggles:

1. Take a judgment-free approach 

It’s always a good idea to remember that no two financial situations are the same. Being mindful of the way you talk about money will go a long way towards making your friends and family feel comfortable about opening up to you about their financial problems.

Approach the conversation with empathy and understanding, recognizing that financial struggles can be deeply personal and emotionally draining to discuss. You want to offer support without criticism or blame. Even if you can’t offer solutions, it’s important to ensure that the person talking to you feels they’ve been heard and understood.

2. Remember financial issues happen for many different reasons

More often than not, there are unexpected life events and emergencies, like health problems, medical bills, job loss, divorce or the passing of a spouse, are to blame for someone falling on hard times. 

Understanding that financial struggles can arise from various circumstances is crucial when offering support to someone facing challenges. 

Acknowledging the complexity of financial struggles and refraining from making assumptions, will allow you to empathize with their situation and provide more effective assistance.

3. Be mindful of their situation

When a person is trying to take control of their finances, they are likely already trying to curb unnecessary spending.

If someone you know is hesitant to spend on an activity or an outing, try to be open and willing to think of less expensive options. That can mean a games night in, watching a movie at home, or just going for a walk together.

They’ll appreciate your understanding of their situation, and the time they can spend with you without having to worry about money.

4. Lead by example and share your own financial problems

Talking about money isn’t always easy. Pushing your financial advice on someone who might take it badly can make the conversation even more difficult. Instead of directing and telling someone what they should do, model the behaviour you think would help that person. Share your experiences and challenges openly. 

Share a story of how you were able to resist buying something you didn’t really need. Or share the ups and downs of your debt repayment journey. Trying to overcome money problems is a goal that almost anyone can relate to. For someone who is struggling financially, this can help them feel less isolated.

5. Let them know you are willing to listen

In any relationship, it never hurts to let someone know that they can talk to you. Make this explicit. Reassuring someone that they don’t have to bottle things up and pretend that everything is fine can be a real comfort, especially if they’re going through a tough time financially. Being patient and empathetic may also help them take the necessary steps towards getting debt help.

Don’t push them if they are only willing to share a general overview of their situation without going into specifics. They may just need a place to vent and get things off their chest while dealing with the situation on their own.

6. Help them decrease other stressors by offering your service

Financial problems alone can cause plenty of stress for an individual on top of everyday life. Poor mental or physical health can make financial health even more overwhelming. If your friend or family member is struggling with their finances, you can help them in other areas of their life to ensure their focus can be on their financial problems.

You could invite them over for a healthy home-cooked meal and ask them to go on a walk or exercise class together. If they have children, you could offer to babysit or give them hand-me-down clothes. Small acts of service can make a big difference in their life.

7. Help them create a budget

Creating a budget is a key step in solving financial problems. If your friend or family member is comfortable sharing their financial situation with you, you could help organize their finances into a budget.

Creating a livable budget while still making reductions on spending can be difficult to do alone. Having a second set of eyes and ideas can help them create a more optimal budget than one they would have created individually.

If they don’t have a budget and don’t know where to begin, you can share your own experience and advice with them. Our budget planner can help anyone get started on creating their own.

8. Loan money if you are comfortable with it

Many people struggling financially don’t want to ask for help and are uncomfortable with the idea of taking a loan from a loved one. It is an option, though, if they have made you aware of their specific circumstances and you know you are able to help.

We know this is not an easy conversation for anyone, and many in financial difficulty may not want to accept a loan from family or friends.

9. Know the resources they can turn to

If you have arrived at a place where a friend or family member is able to open up to you about their financial struggles, knowing the resources they can turn to will make their journey a lot less intimidating. 

If their employer offers an Employee Assistance Program (EAP), help them explore this resource. You can also suggest some money management tools and options. Or you can contact the BDO debt professionals in your area for resources and advice on everything from budgeting options to debt solutions. 

Do you have a friend or family member struggling to overcome money problems? Consider suggesting a meeting with a BDO Licensed Insolvency Trustee for trustworthy and empathetic advice on all matters related to debt.

Do you have more questions?

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May 2, 2024

How to help someone with financial problems

Find out how to help someone with financial problems with these 9 tips meant to create a safe space for friends or family who are struggling financially and emotionally.

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