When someone we are close to has money problems, the warning signs are often easy to spot. They may seem stressed, have unopened bills or repeatedly ask for loans. If they are spending erratically, they may turn up in clothes or in a new car you know they couldn’t possibly afford.
But far harder is knowing how to help. Raising the subject can be a minefield given that money remains a taboo, even among friends and family.
Sadly, as Covid continues to wreak destruction on our finances, more people than ever are struggling with money issues – and are in desperate need of help.
Sharing the burden: Helping a friend who is struggling with money worries can be rewarding
Not just because of reduced income or unemployment, but maybe as a result of unaffordable comfort spending brought on by coranavirus-related anxiety – scrolling through shopping websites while sitting on the sofa and then getting drawn into buying things we don’t need.
According to money coaches and debt experts, embarking on a so called ‘money intervention’ may be difficult, but it can prove hugely rewarding.
Money coach Emma Maslin says: ‘Most people’s finances have been touched in some way by what is going on. Even if their incomes haven’t fallen, the uncertainty makes them worry about what it means for their job, household budget and home. Starting a conversation about such issues with someone you suspect has money problems might lead them to open up about their financial situation.’
Former financial adviser Jason Butler agrees that not approaching the subject head on can help.
Butler, a personal finance wellbeing expert and host of the Real Money Stories podcast, says that sharing your own issues with a friend rather than asking about theirs may help them to open up.
He says: ‘You could say: “I thought I was in control of my money, but a big bill a couple of months ago set me back. How are you getting on with that sort of thing?”’
Another indirect approach he suggests would be to say: ‘I’ve noticed you look a little under the cosh lately – you don’t look your normal effervescent self. Is there anything you want to talk about?’
You may be opening a Pandora’s Box, Butler warns. The root of money issues can be deeper than mismatched income and outgoings. There may be addictions at play, or depression leading to erratic spending. Questioning someone’s ability to deal with money may also feel like an attack on their identity.
Financial coach Simonne Gnessen says empathy is key, adding: ‘You need to convey that you are a safe person to talk to. Express your understanding. Then find a way not to tell them what to do, but draw out of them what the options are.’
If you are able to start a supportive conversation, don’t think you have to have all the answers. Money coach Fanny Snaith says it is more empowering to help someone realise they can find the resources they need to help themselves. She says: ‘If you have create a sense of calm, it can even be fun to find answers together.’
Lorraine Charlton, senior debt expert at Citizens Advice, says showing someone there is help available can be key. She adds: ‘It takes a lot of courage for someone to admit they are not coping. Signposting resources that are available to help with debt can get someone to engage with a problem.’
These include Citizens Advice, The Money & Pensions Service and debt charity StepChange.
Trying to help a friend with finances is hard – and often fruitless. Butler says: ‘If someone you love doesn’t want your help, remember it’s not your fault.’
Money coach helped me beat debt
Self-employed internet expert Neil Maycock struggled with debt for 13 years. It was only when he spent time with a money coach last year that he began to see light at the end of a very dark tunnel.
‘I needed someone saying: “Let’s sit down, have a cup of tea and figure this out,”’ he says. It’s exactly what he did, turning to money coach Fanny Snaith for help.
Neil, who is separated and lives in Sheffield, says: ‘When you’re in debt your mind goes into negative mode. I would start imagining that if I phoned a creditor they would say I would be made bankrupt and then I would lose my company and my home.’
Snaith helped 45-year-old Neil get his finances under control, sitting with him while he made difficult calls to creditors.
As a result, he has cleared debts of £17,000 and is now saving £150 a month towards a holiday when coronavirus restrictions lift. ‘My health is better. I’m calmer and less stressed. I just needed someone to say “you can deal with this”’.