Beating money blues

The beginning of the year is often spent reining in spending. Here are some useful tips to avoid letting debts get on top of you and your loved ones

The first few months of the year are for many filled with plans for the year ahead. However, after an expensive Christmas period, mounting debts can cause considerable anxiety.

While many people will repay Christmas debt quickly, for others it can linger and become problematic. What might once have been a manageable amount can quickly become unmanageable if you were to lose your job or face a drop in income.

Take a look at our useful dos and don’ts to find out how to approach the subject of debt with a loved one or friend who you think might be struggling it.

• Use empathy and open up first about your own situation to encourage a conversation, for example: “Things are usually pretty tight for me in January. How about you?”
  
• Be solutions-focused and offer practical suggestions. One suggestion might be to call up lenders to explain any mitigating circumstances, such as job loss or bereavement. Lenders can agree to reduce repayments for a period of time if affordability is an issue. Sometimes, depending on circumstances, interest can be frozen. Offering details of where to seek expert advice, for instance from specialist charities such as StepChange, can also help.
  
• Be encouraging and optimistic – they will get through this. Your relative or friend has made an important first step even acknowledging their debt openly. It might take a bit of time to sort, but it’s possible.
  
• Listen. This means giving someone the space and time to talk about it. It might not all come flooding out in one go, so leave some conversational gaps.
  
• Ask them if they need any help with reading paperwork or terms and conditions, particularly if they’re not yet very financially experienced or struggle with masses of documentation.
  
• Keep the lines of communication open (without making them feel pressured). Ask them again in a week or two how things are going.
  
• Tell them about your own budgeting tactics, ways you try to save and avoid spending. The things you say might sound obvious to you, but they might be brand new insights for your friend or relative.
  

• Go on about your own experiences. While a bit of empathy is useful, if you just say, “I know how you feel” or “that’s the same thing that happened to me”, you risk making them less likely to open up.
  
• Imply judgment, disappointment or exasperation. The chances are your loved one already feels bad enough about their debt levels. Asking things like “how on earth did you manage to get into so much debt?” or saying “that’s horrendous” will only make them feel worse.
  
• Look shocked if someone discloses the amount they owe. If it sounds like a lot of money, you can calmly acknowledge that this “sounds like it might be a struggle to pay off” and ask if they’re managing their repayments. Try to maintain a neutral but caring expression.
  
• Assume a certain level of financial knowledge – it varies massively among people of different ages, incomes and interest levels. So use “interest rate” rather than “APR”, for example. But equally….
  
• Try not to patronise. Saying “sorry, do you not know what an APR is? Let me explain” sounds helpful enough on the face of it, but might make someone feel small.
  
• Constantly hound them for progress updates. You can go from being a helpful support to an extra pressure if you ask them regularly about their debt situation.
  
• Instantly offer to bail them out. You might decide that this is the best course of action for you and your loved one after careful consideration. However, it’s sensible to consider other options for them to independently manage repayments first.
  

For more information and support, read our article on where to go to get help with debt.