Debt can happen to anyone from all walks of life. Being in financial trouble can also cause further issues, such as mental and physical illness, which can be detrimental to a person’s life. Whether it's for yourself or your friend or family member, it's important that we recognise the signs and signals of debt problems. Recognising debt and making a plan to get out of debt is the best way to stop it from spiralling out of control.
Life events
Life events are a common reason why people get into uncontrollable debt. Perhaps you know someone who has been made redundant and is struggling to find another job. Or a couple that is in the process of a breakup or divorce. Perhaps someone you know has lost their partner or another family member. All of these things are warning signs of debt, it doesn’t mean that people in these situations are always in debt, but this kind of change is bound to disrupt people's finances. As a result, they might borrow money, intending to pay it back in the short term. If they are unable to pay back the money, debt can mount up and become a serious problem. Keep an eye out for any family member or friend that’s gone through a significant life event that may impact their finances.
Ignoring letters
If you find yourself ignoring letters and not opening bills or notices when they come through the post, you might have a debt issue. Many people in financial trouble will choose to ignore the problem completely. Instead of opening their mail when it comes and dealing with the payments or fines, they’ll ignore it and store it away. This behaviour will only work for so long, the debt will continue to pile up, and you might find bailiffs come knocking on your door in a few weeks or months. Denial is also not healthy for your mental state; ignoring your debt can cause more emotional and physical anguish.
Spending habits
Another clear sign that someone is having issues with money is a change in their spending habits. If they stop doing things they enjoy or cancel plans, they may be making changes to try and save money to solve their debt problem. On the other hand, people who spend far too much money that doesn’t fit with their earnings could be in denial and trying to avoid facing the situation. They may have given up and are in the mindset that they’re already in debt, so adding more debt won’t make much of a difference. If you notice someone's spending habits have changed, try and get them to open up about their finances. You can talk to them about financial help, such as applying for an IVA or declaring bankruptcy. Alternatively, talk about a situation where you’ve struggled in the past and how you resolved the previous debt.
Asking to borrow money
If your friends or family members are asking to borrow small amounts of money to get them through, it could be a sign they’re in more trouble than you realise. When they ask for money and promise to pay it back, you can use the opportunity to talk about their financial situation. Try not to make assumptions; people tend to be very embarrassed about their finances and don’t like talking about them. To get them to open up, you need to take your time and avoid being judgemental or giving unsolicited advice; this may stop them from talking to you about their issues in the future.
Recognising a problem with debt is the first step toward tackling the issue and coming out the other side. If you suspect someone is in financial trouble and needs help, try to tell them about all of the free services available for people in debt. To do this, you might need to use your own personal finances or another friend as an example. Speaking about your personal situation may make them more likely to open up and allow you to help them. Some people aren’t aware of the services out there and might just need to be pointed in the right direction to set them back on a better financial path.
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