Why we don’t talk debt

Australians are struggling but are too embarrassed to talk about financial worries,

EMBARRASSED Australians are failing to talk about their money woes despite reaching out for a financial helping hand from family and friends.

One in three people borrow money just to pay their bills but don’t open up and discuss their financial problems with anyone because they are ashamed.

Independent research commissioned by not-for-profit group Good Shepherd Microfinance found if a cashstrapped person needs to borrow money, 61 per cent ask a relative for a loan. About

18 per cent ask a friend while 9 per cent turn to a bank.

Financial Counselling Australia chief executive officer Fiona Guthrie said being ashamed about money problems often meant they bubbled away before turning into something much bigger.

“The longer you put things off, the more difficult they are to solve,” she said.

“The best advice financial counsellors can give is to act early. Contact your creditors, such as banks and utility companies, as soon as you can because they have legal obligations to provide hardship arrangements.”

Ms Guthrie also warned cash-strapped people not to pay someone for financial assistance. She said monetary woes could often be resolved without spending a cent.

“Some people who you pay will tell you they are acting in your interests but you can bet your bottom dollar people who charge are going to act in their interests, not yours,” she said.

“And often people end up in a worse financial position.”

CEO of Good Shepherd Microfinance, Peter McNamara, blamed the soaring costs of living, including electricity prices, for why so many people were turning to others for help to pay their bills.

“The big trend that I’m really concerned about is buy now, pay later schemes like Afterpay and Zippay,” he said.

“We had a client come in with 280 buy now, pay later transactions in just three months.” Mr McNamara said people feeling the financial pinch often did not realise they were heading down a dangerous path “until it’s too late and then they realise they are in trouble”. “We end up doing a huge amount of mopping up afterwards,” he said. Good Shepherd offers low-income earners who make less than $45,000 a year, and who have a health care or pension card, no-interest loans of up to $1500 for items such as fridges, washing machines, school supplies and car repairs. There are no credit checks.

Rising Tide Financial Services founder Chris Browne urged those experiencing financial stress to analyse their weekly expenses to see if they could wind back their costs.

“Most people have unnecessary and impulsive purchases like that extra coffee or infrequently used gym membership that can be cut out without too much pain,” he said.

“It’s important to ask for help if you’re drowning in debt.”

For free financial assistance, contact the National Debt Helpline on 1800 007 007