How to help a friend financially, without breaking the bank

Start with information about the options. To find solutions, support your friend when the going gets tough; help in non-financial forms.

article content

Q: I ran into a friend the other day and we hadn’t seen each other since long before the pandemic. As we always do, we continue to talk about our children, families, work, and summer plans where we left off. However, as we talked, it became clear to me that she really was struggling. I know she was hoping to sell her house to a developer, but now it has fallen through because a neighbor isn’t ready to move in. Unfortunately, that has left my friend in a difficult situation with her finances. She explained a bit about what she’s thinking of doing and I couldn’t help but think of how I can help. I don’t have a lot of extra money to bail her out, but we’ve known each other since high school and I hate seeing her struggling. What can you suggest? ~viviana

Announcement 2

article content

A: It’s natural to want to help a friend or family member when we know they’re in trouble, even if we can’t step in and save the day. When it comes to financial problems, there is a fine line between help and handouts. Whether it’s paying a bill for them, sharing some purchases, helping them find the information they need, lending them money, or asking if they want help, know where to draw the line to make sure your help is really helpful and encourage your loved one to recover. control of your situation. Here are some things to keep in mind:

Asking for help can be difficult

When life gives us lemons, it can be hard to make lemonade, let alone ask for help doing something we think we should already know how to do. No one is born knowing how to manage money or make the perfect glass of lemonade, so try to let go of that stress. If you’re the one struggling with your finances, confiding in a trusted friend or family member can help ease your stress. They can help you navigate possible options to get back on track or see solutions you were too stressed to fully appreciate.

Announcement 3

article content

If you are the one watching your friend or family member struggle, know that asking for help can be difficult. Be nice if you decide to ask them about their struggles. Stick to open questions, listen and reserve judgment. There is always the possibility that your problem is not what it seems.

Those who come to the Credit Counseling Society for help tell us that the hardest part of dealing with their debt is making the first phone call for help. The shame, guilt, frustration, anger or shame that people feel is very real and is currently at an all-time high due to the effects of inflation and the economic fallout from the pandemic.

3 ways to help family or friends in financial trouble

Accepting help can be tricky

Announcement 4

article content

Help is a complicated thing; it’s hard to ask for and hard to accept when it’s offered. However, no one likes to see someone they care about struggle.

Start by recognizing that a person’s personal finances are often a private matter. While you may be told his biggest concerns, there is almost always something more to the story. Combine this with the fact that most people really want to handle things on their own and the best strategy to help is to ask your loved one how best to do it. Allowing them to share what they could use your help with is empowering and begins to allow them to regain control of their situation.

Tips to reduce financial stress and cope better

Know where you stand financially

Before you offer help with cash, a loan, a gift, or a co-signed debt, determine how much you can afford to help your loved one. An injection of cash into someone’s bank account will not solve the underlying problem that got them into debt in the first place.

ad 5

article content

Before you try to bail your loved one out of debt trouble, make sure you’ve found a way to better handle their situation in the future. Ultimately, it’s up to them what they do with the money you give them. If you disagree with their choices, it can cause a permanent break in your relationship.

Borrow money from family or friends to pay off debt

If you choose to lend money to your friend or family member, make sure you can turn the loan into a gift. However, if it really is a loan, seek legal advice on how to draw up a contract, detail payment terms, and determine what will happen if they cannot pay the loan as agreed. Also, a cosigned debt it is not a shared responsibility. Each of you is 100 percent responsible for making payments, and it will affect your credit rating if your friend falls behind on the payments you agreed to make.

ad 6

article content

Adult children on a spending spree? 4 reasons not to rescue them financially

Help without giving money

There are many ways you can help someone without giving them money and without jeopardizing your own financial stability or good relationship. Casually pass around things that you can use, like a bag of groceries, when you spend time together. If you’re buying a two-for-one and only need one, passing up what you can’t use makes sense.

You can also barter for legitimate services or items. Maybe your friend is a good gardener and you could use some help from him. In return, you could offer babysitting, help with a specific bill, cook dinner for their family, or lend their children toys from your home.

How to help family or friends without giving them money

ad 7

article content

The bottom line of helping a friend with financial difficulties

Realizing that a close friend or family member is in trouble can be difficult. But you don’t want your help to mean the end of your friendship or good relationship. Think about what you would need if the roles were reversed, then be that dude. The biggest help often comes from investing more time than money and showing your support with your presence, not gifts.

Related reading:

What to do when someone doesn’t want your financial help

Break up with an unhealthy financial relationship

Help a friend with money problems

Scott Hannah is president of the Credit Counseling Society, a nonprofit organization. For more information on managing your money or debt, contact Scott at E-mailcheck or call 1-888-527-8999.

Announcement 1


Postmedia is committed to maintaining a lively but civil discussion forum and encourages all readers to share their thoughts on our articles. Comments can take up to an hour to be moderated before appearing on the site. We ask that you keep your comments relevant and respectful. We’ve enabled email notifications – you’ll now receive an email if you receive a reply to your comment, there’s an update in a comment thread you follow, or if a user you follow comments. visit our Community Principles for more information and details on how to adjust your E-mail settings.

Leave a Comment