Is a Relative in Debt

Numerous financial pitfalls await the unwary. Among the former are easy credit, predatory lending and hidden costs associated with a product or service, i.e. the “fine print.” Irresponsible spending, particularly gambling, also figures in the equation. Indebtedness is epidemic nowadays. Here are some signs that a relative may be in over his or her head.

Borrowing money may seem too obvious, but it is one indicator that a relative may be experiencing financial difficulties, particularly if that individual asks several different people. While this is like “robbing Peter to pay Paul,” the borrower reasons that owing friends or family members is better than owing a credit card company that charges 20 percent interest.

Withdrawal from social gatherings and activities that entail spending money could be another sign. The financially-beleaguered relative may duck out of the weekly luncheon at a nearby diner, or pass on going to the movies with other family members, typically making some excuse such as “I don’t feel well” or “I have too much to do.” 

Ironically, some people will behave in just the opposite manner, spending recklessly and lavishly whenever possible, insisting on “picking up the check” or buying extraneous gifts and favors. Their attitude may be “I’m in so deep now, so a few more dollars in debt don’t matter.”  

Gamblers often find themselves deeply in debt. This is not to say that purchasing an occasional lottery ticket or going to the casino a couple of times per year is bad, but family members should take notice if a loved one drops $25 every day on lottery tickets, runs to the racetrack two or three times per week, or if he or she purchases “betting sheets” that give weekly odds on professional sports games, e.g. The Gold Sheet.

A home in disarray may also signal that a relative is having trouble meeting financial obligations. When people are overwhelmed with money problems, other areas of their lives often suffer. Someone who is worried about whether there is enough money to pay next month’s rent may not be as vigilant about vacuuming or doing the dishes. If the relative is normally very meticulous about housekeeping, this departure from domestic order can be telling.

If a relative is evasive about his or her financial affairs, or acts like there is something to hide, then there probably is. This can manifest in behaviors such as quickly deleting phone messages, hiding or destroying mail (which is likely warnings from creditors), and even lying in general. 

Excessive credit card use can indicate financial hardship. For an individual to accumulate six, eight or even 10 credit cards is not unusual, and depending on the respective credit limits, to max them out. If a relative almost never uses cash, even for small purchases, something might be very wrong with his or her financial health.