If you’re in debt or facing money trouble, it is becoming more normal to turn to friends and family for help. But are your choices the best for them?
When things get really tight where do you turn?
In our darkest days, we were literally surviving on the breadline with little money to get by. With the phone ringing off the hook being chased for debt, we panicked about money.
Where is the money coming from to pay the next bill? How could we replace the fridge freezer that just broke? What were we going to do to put food on the table?
Having money, even just a little bit to survive, can make the world seem better. So when you have no money and you’re not creditworthy, the places you can turn to access cash aren’t always the best.
Where do you turn for help?
According to a new report from debt charity Christians Against Poverty, people are more likely to turn to friends and family to help cover the costs of rent/mortgage and food. When you’re stuck, 58% of people will ask for financial help from their nearest and dearest.
This is vastly different to those over the age of 61. It appears that the next age brackets up do not want to reach out for support from friends and family. Instead, they turn to credit cards or overdrafts when bills cannot be paid or they cannot afford food.
It really worries me. It looks like there are one set of generations who will ask those older than them for money, and the older generation that will not ask the other way. The bank of mum and dad are called upon, but maybe they need a break.
Borrowing from family
Borrowing from friends and family comes with more difficulties. Not only are you going to have creditors asking for your money back, but your family are going to be over your shoulder. You’re then caught in a cycle of owing money to the one group of people. These are the people you’re likely to talk to about your issues and you may not feel comfortable now.
January is a tough month when it comes to money. A lot of people overspent at Christmas and December payday was early. This makes the next pay day feel even further away.
If you’re struggling to pay a bill, while it’s lovely that relationships are there with family to ask for financial help, perhaps it’s also worth checking that they are ok financially.
Can they afford to give you or lend you money?
Would it put them into a situation of needing to use debt with interest added to get by?
What really worries me more than anything is the younger generation’s views on money still. Those under the age of 25, while will in the majority reach out to family for help, will next be most likely to use an overdraft or a payday loan. These types of borrowing have some of the highest rates of interest around and are a struggle to pay back.
Debt is normal
The trouble is, it’s clear as a nation we are struggling. Debt has become such a normal thing that everyone has it! The average house price in my town was announced quite recently at £375,000! How achievable is it for someone working in an averaged paid job (around £28,000) to afford to buy their own home?!
Money troubles feel like they’re going to get worse before they get better. Whatever the issues of the past, be it lack of financial education in schools or parents not teaching some basic principles, money issues exist. We cannot change that.
The only thing that can be done now is to try to escape from bad debt.
Having a credit card is fine, provided you can pay it off each month, you’re not paying interest and you can manage it. A credit card is not fine if you are maxing it out every month, or only making the minimum repayments.
If you are affected by poor money decisions and debt, friends and family aren’t the only ones you can turn to. Please reach out to a free, impartial debt organisation who can help you like StepChange or Christians Against Poverty.
Ricky Willis is the original Skint Dad. A money-making enthusiast, father, and husband to Naomi. He is always looking for unique ways to earn a little extra.