Advice, referrals can help willing loved ones deal with debt

Juan Pinon, an electrical engineer in McAllen, Texas, struggled with credit card debt for years. It wasn’t until he confided in his sister that he began to turn things around.

“It just so happened that one day I opened up to my sister, and she confessed to me that she had debt issues and was able to get out through professional help,” Pinon said.

Getting a vetted referral to a nonprofit credit counseling agency and encouragement from someone he trusted convinced him to take action. Pinon enrolled in the agency’s debt management program and paid off about $50,000 in less than three years.

It’s difficult to watch people we care about struggle with debt. Debt can disrupt their financial and personal lives, as well as the lives of those around them. As a close friend or family member, your influence can be powerful enough to spark change. Here’s what you can do to help a loved one deal with debt.

Proceed with caution

Unlike Pinon, people with debt won’t always raise the issue themselves. Bringing up someone else’s personal financial matters can feel like overstepping a boundary. If you think it’s important to intervene, be strategic about setting the right tone.

The first step should be asking if they’re open to the conversation, said Kathryn Ellywicz, a marketing and communications specialist and former counselor at GreenPath, a nonprofit credit counseling agency. Giving them a choice may prevent them from feeling ambushed.

If they’re willing to discuss their debt situation, speak kindly and withhold judgment. “A lot of times, our family members feel shame around financial debt. So it’s a conversation that needs to be entered into very carefully,” said Brandy Baxter, an accredited financial counselor in Dallas.

If you’ve been in a similar position, consider telling your loved one. Drawing on your own experience with debt and acknowledging the emotions involved can help you come at it from an empathetic place.

“We can use ourselves as an example to say, ‘Hey, I was there, I understand. I’m not trying to put you on the spot. I myself went through this embarrassment. Please let me help you,’” Pinon said.

Respect their refusal for help

Your friend or family member might shut the conversation down. That’s OK.

“Debt can be addictive, just like any other addiction. The person that’s in the cycle may not see anything wrong, and so they may not be ready for help,” Baxter said.

Baxter said you can also use this as an opportunity to reset boundaries. If you’ve been providing financial support for them and no longer feel comfortable doing so, explain the circumstances and ask them to respect your decision in return.

Share knowledge and resources

If your loved one is ready to dig out of debt, help them take the next step. You can talk to them about the emotions that might be influencing their spending behavior, explore different debt payoff methods or look over their expenses.

“Maybe you come together and say, ‘OK, here’s how I do my budget. Let’s work

on how you do your budget. Or here’s how I’ve set up my spending plan. Let’s work on setting your spending plan,’” Baxter said.

But not everyone feels comfortable letting their friends and family dig into the nitty-gritty details of their financial lives. Besides, not all of us have the expertise to take a do-it-yourself approach.

“Of course, there’s always the professionals,” Ellywicz said. “Sometimes, even just giving a referral is a lot of help.”

Come prepared with a list of trustworthy resources, such as online tools, nonprofit organizations and financial counselors. Nonprofits, such as credit counseling agencies, typically offer low-cost or free services and meet certification requirements for quality and ethical standards.

The Association for Financial Counseling & Planning Education offers free virtual financial counseling and coaching sessions. Those struggling to pay bills or afford basic necessities can call 211 or visit 211.org to find local assistance.

Set holiday expectations

As the holiday season approaches, your loved one may feel increased pressure to splurge. Discuss keeping plans simple.

Baxter suggests looking for alternatives to gift-giving that will lessen the financial burden, such as volunteering to host a special dinner.

Check in with them throughout the year. Debt payoff is a journey, and the journey may be a little easier with you by their side.