Helping a friend or family member in financial hardship

Being there for others in the best way you can

If you want to support a friend or family member who is having a tough time, here are some tips about what to do, and services that may be able to help.

Talking about money

Money can be a very sensitive and personal issue for many people. It's important to remain unbiased and non-judgmental so the other person feels comfortable opening up to you about their money problems. Here are some tips:

  • Only ask them about relevant information that you need to know in order to work out how to help them. Avoid prying into irrelevant personal details.
  • Put yourself in their shoes and show compassion for the situation they're in. 
  • Accept the person for who they are and don't try to change them.
  • Let them know there is support available for them. 

Work on a budget together

If you feel comfortable, ask them to bring you copies of their financial documents, such as pay slips, any Centrelink statements and bills, so you can go through them together and get a clear picture of their income and outgoings. The easiest way to get an idea of their financial situation is by helping them do a budget.

Know where you stand financially. 

Budget planner

Find the right support

It can be confusing and stressful to work out where to go when you need help. The greatest assistance you can give your friend or family member is to help them find the right support.

  • See urgent money help if they need immediate help with living expenses, such as rent or bills or to buy food
  • See no or low interest loans, if they need help to pay for essential household items, such as a fridge or washing machine, or to fix a car 
  • See trouble with debt, if they are having problems managing debts or dealing with debt collectors
  • Use Centrelink's payment finder to see if they are entitled to any government assistance. 

Financial counselling

Financial counselling is an independent service offered by community organisations, community legal centres and some government agencies. Financial counsellors help people in financial difficulty. They provide information, support and advocacy for people with immediate financial problems and minimize the risk of future problems. Their services are free.

Financial abuse

If you know or suspect that some of your friend or family member's financial problems are due to another person running up debts in their name, or pressuring them to spend money or sign up for a loan, they may be experiencing financial abuse. Visit our financial abuse webpage for more information, and the contact details of some organisations that can help.

Support for people affected by bushfires

If your friend or family member has been affected by bushfires, see what to do after a natural disaster.

Think carefully before lending money to friends and family

It can be really hard to refuse a friend or family member when they ask for financial help. But it's important to ensure that helping them won't put you in a difficult financial position. You also don't want to risk losing a good friend or falling out with a family member because of money. 

Before lending money consider the following questions:

  • Can you afford it? Check your budget to see if you can afford to lend them the money and factor in the chance that they won't pay you back in time.
  • Can they afford to pay you back? Don't be afraid to ask them how they intend to pay you back and agree a time period.
  • What will you do if they don't pay you back? While it is a sensitive topic, ask them upfront before you lend them money what will happen if they don't pay you back on time. Make sure you are comfortable with their response and seriously consider how not getting the money back will affect your budget.
  • Are there other ways you can help? It's ok to say no to a friend or family member who asks to borrow money. There may be other ways you can help out. For example, you could offer to babysit their children or help cook or clean so they can attend work or meetings, or you could lend them tools, appliances or even your car so they can save money by not having to buy them. 

Get it in writing

While it may seem overly formal, it is wise to write down any agreement if you decide to lend money to your friend or family member. Include the amount of money they borrow and the agreed timeframe for them to pay it back.

Take care of yourself

Providing support for someone in financial difficulty can be difficult and emotional. Make sure you set clear boundaries about how involved you get in another person's life. It's important to seek support and comfort for yourself as well.

If a friend or family member is having problems with money, it's natural to want to do what you can to help them. Talk to them about the issue and find out what services and support are available.

Related links

Last updated: 16 Jan 2020