Encourage open conversations and promote financial independence while protecting your own well-being.
Q: During a recent lunch, my sister opened up about the financial problems she and her husband are facing. Although I had suspected something was wrong, I hadn’t realized the extent of it. While I’m grateful she confided in me, I’m unsure how best to support her. Offering her money or a loan doesn’t seem like the best solution, especially since part of the issue seems to be their spending habits. My sister says she’s tried to discuss their money problems with her husband, and then they both try to cut back for a while, but it’s never long enough to make real progress. She’s very worried about their situation, is there anything I can do to help? ~Sabine
Recommended Videos
A: Discussing significant financial difficulties with a loved one can be challenging. In addition, debt and financial stress often lead to anxiety, frustration, and hopelessness, making it hard for someone to seek help. Offering support when a friend or family member struggles with debt can be crucial to their well-being and recovery. However, it’s essential to approach the situation with sensitivity and understanding, while also ensuring that your own financial stability and well-being are not compromised. Here are some tips to effectively support a loved one dealing with money problems.
Recognize the emotional weight of debt
The stress of mounting debt can also affect someone’s mental health, leading to sleep disturbances, reduced productivity, and strained relationships. Many people feel ashamed or embarrassed about their financial struggles, which typically delays them from seeking help. Financial stress can contribute to feelings of isolation, as individuals may withdraw from social activities to avoid spending money or having conversations about their situation. Understanding the emotional weight of debt is crucial when offering support, as it allows you to approach the topic, and potential solutions for your loved one, with greater empathy and care.
How to discuss money problems with a loved one
When discussing debt and money problems, it’s important to approach the conversation with empathy and tact. The survey found that one-third of Canadians rank discussing difficulties with their personal finances as the least comfortable topic, ahead of discussing mental health, personal relationships, or physical health. So start by arranging a private and comfortable setting before initiating any talk.
Plan a time with your loved one so they feel relaxed and not ambushed or judged when you bring up the topic. Involve a spouse or partner when your friend feels it’s appropriate. Avoid bombarding them with a series of questions they may not have answers to. Instead, encourage them to share as much as they’re comfortable sharing and ask open-ended questions, allowing them to express their feelings and fears without interruption.
Avoid offering immediate solutions or criticisms, as this can cause them to shut down or end the conversation. Bring a notepad and let your friend or family member know that you will make a few notes if an idea for a solution comes to mind. If you’ve faced similar financial challenges, share your experiences to help normalize the situation and reduce any shame they might be feeling. Discussing how you resolved your situation can also provide hope and demonstrate that overcoming debt is possible.
Options for practical support
Set boundaries when offering financial assistance
When offering financial assistance to a loved one, it’s important to set clear boundaries to protect both your finances and your relationship. Before lending money, take an honest look at your own financial situation to ensure that helping won’t put you at risk. If you decide to proceed, setting clear terms is crucial, and having a written agreement that outlines repayment expectations can prevent misunderstandings and potential conflicts down the road.
While it’s natural to want to ease their burden, be mindful that in reality, constant financial support could enable poor money habits rather than encourage long-term financial independence. Instead of simply providing funds, consider offering practical support with acts of service, such as babysitting, meal prep, or planning no-spend entertainment events. Your goal should be to provide temporary assistance while empowering them to take control of their own financial future.
The bottom line on helping a friend or loved one with money problems
Related reading: