Debt has always been a daunting topic for some. When those that are closest to you are struggling with debts, your initial response may be to try and help them. Being over-indebted isn’t necessarily a bad thing, it just shows that you have struggled to keep control over your finances. However, there are ways to regain control and get things back on track.

How do you identify if  someone has  a debt problem?

According to Russel Dickerson, “If a family member or friend approaches you to borrow money for monthly essentials just to get through the month, they’re likely struggling with debt”. This is a good indication that they need help from family and friends. Another indicator is nervous behaviour and a general stress towards the end of the month. Maybe they have told you that they keep on needing to borrow more each month.

You obviously want to assist, but the question remains – should you help your loved ones pay off debt or not? 

Well, it’s a tricky one to navigate. We would recommend the following tips to help you understand their financial situation and see how you could help:

1: Have a meaningful conversation with them

It’s important for you to understand what they might be going through mentally, emotionally and physically. Some people are more open to the idea of speaking about their current financial situation than others. Therefore, it is important not to force it, but rather provide support and care. Russel Dickenson, president of the Debt Counsellors Association of South Africa, states, “be prepared to listen and not be judgemental (because) this person needs a safe space to discuss and come to terms with the situation”.

2. Try to understand the scale of the problem

Ask appropriate questions so that you will be able to offer better advice. Possibly a good place to start is by getting your loved one to pull a free credit report. You need to try identify if this debt issue can be solved in a matter of weeks or months or is it a longer term issue that needs professional guidance? Here are the following NCR registered credit bureau’s we recommend for free credit reports:

1.   Experian

2.   TransUnion

3: Help them out with some basic tips and advice

From something as simple as helping them write-up a budget, it can really help them understand their financial situation from an outside perspective. More so, you don’t necessarily have to help them out by giving them money. You could give them sound financial advice or redirect them to someone who might be able to assist them in getting on to the right path again. 

4: Don’t be scared to ask the professionals

Lucky for us, we live in a day and age where it’s as simple as jumping onto Google and finding a financial professional or a debt management company (Like us!). Speaking to a financial professional or a debt management consultant will provide your loved one or friend with options to help them out of debt. There may be many ways to reduce installments and save on interest.

5: A bit of encouragement goes a long way

Encouragement is the most powerful way you can support your loved one. Encourage them to spend their money wisely, to start saving where they can, and create an emergency fund.

It may be hard seeing your loved one or friend having to go through a tough time, but at the end of the day they might thank you for reaching out, providing the support they need and encouraging them to seek help with their debt. 

We really hope that this has helped you to make an informed decision. Good on you for helping your loved ones.