How to help a Relative who is in Debt

It is very tricky territory when a relative is in debt. Your automatic response might be to give them some money to help them get out of their financial bind. Some people might run the other direction and avoid phone calls, text messages and emails at all costs. If you are unsure what to do to help your relative with their debt troubles, then read on for some suggestions and helpful hints.

• Be prudent when offering financial assistance

It is a natural reaction to want to give or loan your relative enough money to at least help them start paying off their debts. No one likes to see their loved ones struggle just to make ends meet. The problem with loaning money even to a relative is that they can become dependent on your help. Another problem can arise when it is time to pay the loan back and they are unable to do so. These scenarios can cause bad blood between family members. Trying to fix your relative’s debt problem for them is not really doing them a favor at all. If you do decide to loan them money or pay off some of their debts, be sure to set the guidelines up before the money ever leaves your hands. An example guideline is that this is a one time loan and will not keep happening, another is determining how long they have to pay you back. Do not allow money to come between you and your loved one so explain why you are putting limitations on your money assistance.

• Help them find resources

There agencies that will help people pay things like gas/electric bills and also places to get food for families. Many of these agencies are more than willing to offer assistance in exchange for work or volunteering time to help the community in some way. Some of these agencies even have job assistance programs. The thing to remember is these agencies offer temporary/emergency help, and will not continue to pay utilities or other living expenses indefinitely. 

• Encourage them to find ways to make extra money

Try to help them figure ways to make extra money by having a yard sale, picking up side work like freelance writing or yard care. There are many ways to earn extra cash, they just have to figure out what will work with their current job. If they are unemployed, then offer to assist them in their job hunt. When people are down on their luck and in debt, they can become overwhelmed and begin to feel hopeless. Encourage your relative by going with them to pick up applications and offer to have lunch with them while they fill them out. Tell them about any job opportunities you hear about and offer to help do online job searches. 

• Be there to listen

One of the best things you can do for your relative is to listen when they need someone. Being in debt is extremely an stressful time in a person’s life and it can help greatly just knowing someone cares enough to listen when they need to talk about it. Avoid passing judgement and speaking down to them, just listen and be a shoulder if they need it. Sometimes people can work their own problems out just by having someone to bounce ideas off of occasionally. 

• Help them figure out how to save money

Sit down with your relative and go through their monthly expenses. Help them figure out where they can cut costs and put that saved money towards their debts. Your relative might be pleasantly surprised just how much money they can save simply by adjusting their monthly budget. Examples of things they can cut back on include eating out, entertainment (concerts, movies, etc.) and non-necessity shopping trips. They can also temporarily shut off their cable and cancel subscriptions and memberships. 

Debt is a problem for many people these days, and it is easy to feel sympathy for those suffering with it. This is sympathy is even stronger when the person suffering under a stack of bills is your relative. Before you run to the bank to draw out any money for them, stops and think about the possible long term effects of that decision. Try to come up with other useful ways to help out your relative like helping them find a job, or assisting them in finding community resources. If you feel you really must loan them some cash, be sure they know it is just a loan.