Many of us have at least one relative or friend who is struggling financially. Should you step in or let them ride out the storm on their own? With consumer debt at an all-time high (as of May 2025), advice and assistance can be a welcome prospect. But it’s important to think carefully about how exactly to extend an offer.
Should you offer cash? Strategies for better money management? A link to a personal finance podcast you love?
Maybe the person will be embarrassed or insulted if you offer money. Perhaps they would feel more comfortable with moral support or meals and childcare rather than a cash infusion. Gauge what your loved one needs and will accept. If you are planning on loaning them a bundle of cash, you’ll have to be clear that you’re not gifting them the money free and clear and establish reasonable repayment terms.
Here’s guidance on how to help someone budget their money and rise above financial struggles.
Key Points
• Financial difficulties often stem from significant life events or personal habits.
• Letting a loved share their financial concerns, and sharing your own past issues, can foster empathy and understanding.
• Practical gifts and career assistance can enhance self-reliance and morale.
• If possible, resist offering loans or employment, as these can end up damaging relationships.
• Educate on budgeting and use of financial tools for lasting improvement.
Why Helping With Finances Can Be Difficult
We get by with a little help from our friends, to paraphrase the Beatles’ lyrics. But knowing when and how to assist in a financial crisis is often tricky. Most people want to be better at managing money, but achieving that can be a challenge.
Money mismanagement often runs deep. It may have been established when the person watched their own parents spend in a flurry and then not be able to pay bills on time.
The issues could also stem from clashing money mindsets between spouses, a failed business startup, job loss, crushing medical debt, or the difficulty of setting money aside when raising a family. The list goes on and on.
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The Effects of Financial Stress
Money worries can affect life in many ways. Be sensitive to these signs of financial stress; they can reveal that a person is struggling even when they don’t come out and say so.
• Depressed attitude: Maybe the burden is so heavy that your friend can’t get out of bed in the morning or fall asleep. Perhaps they no longer participate in their usual activities.
• Poor health: Not being able to afford grocery, utility, and housing bills can sometimes take a toll on physical and mental well-being.
• Phone avoidance and isolation: Constant calls from debt collectors can lead to high anxiety and even shame. Your friend may isolate themselves. It’s hard to hear terms like “broken promises” from a mortgage company or to be told by a car leasing company that your vehicle will be towed from your driveway. Ouch.
• Shrinking self-confidence: Even job loss due to across-the-board staff downsizing can feel personal, making it hard to stay confident about future career goals.
• Mourning a former lifestyle: When someone has to step down to a smaller car or apartment or can no longer afford to eat out or help pay for their kids’ colleges, life might feel lackluster and the future may look bleak. It can be hard to remember that good health and family/friends are most valuable, and funds will likely follow.
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15 Tips for Helping Someone Struggling Financially
These steps can offer immediate as well as long-lasting relief to someone in a cash flow crisis.
1. Give money free and clear. Some finance coaches say a clear one-time cash gift can be best, if you can afford it, rather than extending a loan you expect to be paid back. This way, your friend won’t feel indebted to you. Loans might bring up a minefield of problems, including resentments about how the recipient can afford a vacation (or dinner out or new sunglasses) when the debt is still unpaid.
2. Teach your friend to budget. If you know how to help someone make a budget, you have the golden toolkit. With luck and commitment on your pal’s part, your time and effort will repay itself again and again, as they navigate inevitable ups and downs. Remember the old proverb: “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.”
3. Share smart finance apps. To teach your friend ways to manage money better, you might explore some budgeting apps (such as YNAB, Goodbudget, or PocketGuard) together. The monthly investment to use these apps ranges from zero to $14.99. You might gift them a year’s subscription.
Another option: Coach them on the tools their financial institution offers. Many banks offer free tools that help with expense tracking and other aspects of budgeting.
4. Help set healthy “helping” boundaries. Does your sister still pay the cell phone bill for her grown son, now a husband and father? Is it him or is it her who’s enabling him and holding on to the past? Talk it out.
5. Provide information about financial support groups. Your loved one may need help with a spending problem or could perhaps use guidance when creating a debt reduction plan. The Debtors Anonymous program, for example, offers help via meetings, literature, and support. But remember to share the idea, and then leave it alone for your friend to pursue vs. nagging.
6. Find free workshops. Many libraries, churches, and community centers offer no-cost events for job seekers or on topics like how to organize your finances. These networking opportunities tend to be less overwhelming than packed job fairs.
7. Suggest a consolidated debt management plan. Debt management plans (DMPs) can condense several unsecured debts into one monthly payment that generally helps someone pay off debt faster and experience less stress. Most legitimate companies offering this service are nonprofit consumer credit counseling agencies; they work with businesses to reduce interest rates or waive fees. DMPs don’t shrink debt, but restructure it. (Experts say it typically takes three to five years to pay off debts this way.)
8. Introduce money management software. Programs like Quicken can help with building a financial plan on a laptop or PC by categorizing expenses, simplifying tax prep, and more.
9. Open up about your money past. People tend to feel less alone when they know others have traveled the same rocky path. Talk about any money issues you’ve faced in the past, the fear you experienced, and how you turned your finances around. Don’t forget details like how bored you got with ramen noodles.
10. Help with a LinkedIn profile. Seeing one’s career accomplishments listed all in one place can be a confidence boost. Assist with a great photo (maybe even pay for a headshot session), attaching links, and reaching out to connections.
11. Give a gift card toward financial essentials. A gift card to the grocery store or gas station is always welcome and is not too sweeping a gesture to overwhelm someone.
12. Find out the cost of mental health support. Your friend might really need it now but think they can’t afford it. Offer to call their health insurer regarding coverage and/or co-pays for therapy and psychiatry.
13. Gift a new interview outfit. Is your loved one job hunting? New clothes can be a major confidence boost, and you could offer to pay for that, right down to shoes. Looking like a million bucks often matters, and shopping together is fun.
14. Listen. In good or bad times, people often just want to be heard. Letting your friend share their concerns can help them process their emotions, gain a new perspective, and feel less alone.
15. Offer family support. Drop off a home-cooked meal, have a pizza delivered, or watch the kids for an evening.
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Things to Avoid When Trying to Help Someone Financially
Some offers of assistance may not be as helpful as you would hope them to be. Here are some steps you may want to avoid when considering how to help someone with financial problems.
1. Extend a personal loan. This turns a personal relationship into a business one and could potentially lead to losing a friend or creating a family rift.
2. Hire a friend or relative to work at your business. What if the job doesn’t work out and you wind up firing them? Yes, it’s a worst-case scenario, but if it happened, then seeing them could be painful and awkward for years after. This wound could take years to heal, if it can even be repaired.
3. Prevent young people from learning a vital lesson.. Did your adult child run up credit card debt splurging at the mall? Don’t rush in to save them too quickly. Maybe they need to learn a life lesson, by taking the time to pay off the balance on their own.
4. Give something with strings attached. This means it’s wise not to extend IOUs. This manipulative tactic can prey upon someone at a vulnerable time. For example, you might not want to offer someone a place to crash with the condition that “I know you will help me and my family out if this ever happens to us.”
The Takeaway
With factors like inflation and high credit card interest rates, financial struggles can be very real and create significant stress. If someone close to you is struggling financially, there are plenty of practical and graceful ways to help, from a no-strings cash gift to financial advice. This type of support can help ease your friend’s or relative’s money worries while empowering them to take concrete steps toward financial stability.
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FAQ
What are the downsides of helping someone with financial problems?
The downsides of helping someone who is struggling financially are that you may wind up having less money yourself, you may extend help that isn’t paid back promptly, or your friend may feel shame or embarrassment over accepting your assistance.
Is there a time when you should say no to helping someone with financial problems?
Some financial experts caution against bailing someone out if there is an important lesson to be learned. For example, if your friend books a fancy island resort hotel for a week and then cannot swing their household bills, they may be better off learning how to budget and plan than having you provide an infusion of money.
How can I find the time to help others with their finances?
Helping others with their money problems does not have to take too much time. It may be as simple as blocking out a couple of hours to give a budget lesson or making a coffee date to discuss financial software programs and money apps. If someone is struggling financially, you can also offer quicker comforts, such as a grocery or gasoline gift card.
Photo credit: iStock/baona
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