30 Sep 2021

How to Help a Friend With Financial Difficulties

6 minutes read time.

Key Points

  • No one likes talking about financial problems. But when a friend or loved one is going through a hard time, it’s important to create a safe space for them to talk.

  • You don’t have to be a financial expert to help. You can listen without judgment. You can offer support without having to dictate a solution.

  • There are tangible ways you can help without making it weird, some of which don’t require spending a dime.

Money problems — they aren’t fun to have, and they aren’t fun to talk about. But almost everyone experiences financial difficulties at some point in their lives. How can you help a friend or loved one who’s facing a cash crisis? How do you avoid “helping” in ways that cause more harm than good?

We’ve got you covered. Here are some things to know about helping a friend through a financial crunch.

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Know when to say something

Most of us love talking about money as much as we love a tooth extraction. So, if you’re sitting there waiting for your friend to sound the alarm, you might want to get comfortable.

Or you can skip the wait — and, instead, learn why many of us are so reluctant to share our financial problems, how to recognize the signs of trouble, and how to make the conversation feel less like pulling teeth.

Why it’s so hard to talk about money

It’s not just you. One survey found nearly 6 in 10 people actively avoid talking about their finances with friends. Some of us were taught as kids that it’s rude to ask others about money. And in the workplace — especially in Western countries — telling others how much you earn is taboo.

Ok, but why?

Well, partly because we associate money — both how much of it we make and how we manage it — with our success as individuals or even our character. So, when a friend runs into money problems, no matter the reason, they’re likely to see it as a personal failure, as something innately wrong with them. Which is odd, considering none of us came into this world with a degree in personal finance.

It’s time to take the stigma out of talking about money. But remember, your friend may not make the first move. That’s why it helps to know the signs of trouble.

How to tell if a friend is having financial problems

Some of the signs are easy enough to spot. If your friend just lost a job, or if their business is hurting, it’s a good bet they’re feeling the financial pinch.

But there are other, less obvious signs to look out for too:

  • If they pass on activities they once did in a heartbeat, like going to their favorite restaurant or catching a movie.
  • If they change the subject whenever money comes up.
  • If they seem worried or stressed, or are showing signs of depression.
  • If you notice they’re using multiple credit cards to pay for stuff.

If you think your friend is facing a cash crunch, then it might be time to say something — and the “how” matters every bit as much as the “what.”

Creating a safe space to talk about money

How do you get your friend to open up? They’re more likely to engage if they know they’re in a judgment-free zone. Ask questions with empathy and curiosity. Make it a safe space for them to share their financial difficulties.

Here are some ways you can get the ball rolling:

  • If they’re unemployed, it’s a good bet they’re worried about money. You could ask: “How are you feeling right now about your finances?”
  • If you’ve seen a change in behavior, bring it up. For example: “I noticed you haven’t been going out as much lately. Is everything ok right now?”
  • Start the conversation from a place of humility: “I don’t have all the answers, but I’m here to listen and support.”
  • Most of all, take the stigma out of it: “It’s totally normal to have money problems. No judgment here.”
Man talking to a friend about financial difficulties

Know what to say (and what not to say)

So you’ve gotten your friend to open up — winner! Now what? There are three simple steps you can follow.

Listen, without trying to identify the cause of their money problems.

The first step doesn’t require you to do much talking. Just the opposite.

Avoid asking questions that can be answered with a simple yes or no, especially if your friend is at a loss for words. Instead of asking, “Are you ok?” you could ask, “What’s worrying you most right now?”

Resist the urge to jump in and interject. And above all, don’t try to diagnose their difficulties. They need you to be their friend, not their financial adviser.

Offer solutions, but only when asked.

You may know of some ways you can help. (And if you don’t, no worries. We’ll get there.) But your friend may not be looking for solutions from you just now. They may just want your presence and understanding. They may need someone to show them there is nothing shameful about having financial problems.

If they do ask for advice or help, go for it. But don’t force it on them.

Share your own experience to empathize, not to dictate answers.

Most of us (not counting billionaires rich enough to build their own spaceships) will have money problems at some point in our lives. If you’ve been there before, try sharing some of your own story. When a friend or loved one is struggling, it always helps if they know they’re not the only one.

A word of caution, though: your friend’s experience may look different from yours. Their way out of financial hardship may not be the same one you took. Use your story to empathize, not to provide answers to their story.

Man with his arm around a friend supporting him with financial challenges

Know how to help, without making it weird

You may feel the impulse to do more than listen — and that’s good. There are some ways you can help without putting your friend in a weird position. Just make sure you follow their lead and make sure to offer help without imposing it.

Money-free ways to hang out

Instead of going to the pub or catching a ball game together, invite them over to your place for drinks. Offer to go on a bike ride or a walk.

Sure, you could go out to eat and pick up the tab for them, but that might do more harm than good in the end. Nobody enjoys feeling like someone else’s charity project.

Non-cash ways to help

There are loads of ways you can help without forking over cash. Invite your friend over for dinner. It’s a great way to save them some money without making them feel conspicuous about it. You could share streaming accounts for a bit. (Just don’t tell Hulu we said so.) If your friend has kids, offer to watch them so they can run errands or go job hunting…or just to get a breather.

What to do (and not do) if you give cash

If your friend’s financial situation is particularly bad, and they need help now — and you’re in a place to give that kind of help — here are some things to consider.

  • Make it a gift, not a loan. You’ll inevitably change the relationship by loaning money. Chances are, they’ll feel indebted to you. And if they’re not able to pay it back? It could hang over your friendship.
  • Give anonymously, if you can. The goal is to help, not to win “friend of the year.” Try slipping some cash through the letterbox or even speak to their partner. If you can help without them knowing who it came from, it’s less likely to make things weird.
  • Try giving gift cards. Since we give them to loved ones all the time, there’s less chance of it feeling like an act of charity. And it can help your friend stock up on things they need without draining their savings.

Money problems are, unfortunately, part of the human experience. You can take some of the stigma out of them for your friends by starting the conversation, being a good listener, and helping in inconspicuous but meaningful ways.

I have no idea how I’m going to find a job at this point. It's really getting to me.That sounds really tough.

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