How to Help a Friend With Debt and Money Problems

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Q: During a recent lunch, my sister opened up about the financial problems she and her husband are facing. Although I had suspected something was wrong, I hadn’t realized the extent of it. While I’m grateful she confided in me, I’m unsure how best to support her. Offering her money or a loan doesn’t seem like the best solution, especially since part of the issue seems to be their spending habits. My sister says she’s tried to discuss their money problems with her husband, and then they both try to cut back for a while, but it’s never long enough to make real progress. She’s very worried about their situation, is there anything I can do to help? ~Sabine 

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A: Discussing significant financial difficulties with a loved one can be challenging. In addition, debt and financial stress often lead to anxiety, frustration, and hopelessness, making it hard for someone to seek help. Offering support when a friend or family member struggles with debt can be crucial to their well-being and recovery. However, it’s essential to approach the situation with sensitivity and understanding, while also ensuring that your own financial stability and well-being are not compromised. Here are some tips to effectively support a loved one dealing with money problems.

Recognize the emotional weight of debt

Debt is not just a financial burden; it carries significant emotional weight. The Credit Counselling Society’s 2025 Consumer Debt Report reveals that among those who saw their debt increase last year, at least 80 per cent feel worried or anxious, 77 per cent feel frustrated, and 45 per cent feel hopeless. In fact, these same survey respondents reported that “talking about debt” is their second greatest fear next to “swimming with sharks.” For anyone who has never experienced the debilitating weight of debt, it can be difficult to empathize with someone who is suffering and hesitant to discuss it openly.

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The stress of mounting debt can also affect someone’s mental health, leading to sleep disturbances, reduced productivity, and strained relationships. Many people feel ashamed or embarrassed about their financial struggles, which typically delays them from seeking help. Financial stress can contribute to feelings of isolation, as individuals may withdraw from social activities to avoid spending money or having conversations about their situation. Understanding the emotional weight of debt is crucial when offering support, as it allows you to approach the topic, and potential solutions for your loved one, with greater empathy and care.

How to discuss money problems with a loved one

When discussing debt and money problems, it’s important to approach the conversation with empathy and tact. The survey found that one-third of Canadians rank discussing difficulties with their personal finances as the least comfortable topic, ahead of discussing mental health, personal relationships, or physical health. So start by arranging a private and comfortable setting before initiating any talk.

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Plan a time with your loved one so they feel relaxed and not ambushed or judged when you bring up the topic. Involve a spouse or partner when your friend feels it’s appropriate. Avoid bombarding them with a series of questions they may not have answers to. Instead, encourage them to share as much as they’re comfortable sharing and ask open-ended questions, allowing them to express their feelings and fears without interruption.

Avoid offering immediate solutions or criticisms, as this can cause them to shut down or end the conversation. Bring a notepad and let your friend or family member know that you will make a few notes if an idea for a solution comes to mind. If you’ve faced similar financial challenges, share your experiences to help normalize the situation and reduce any shame they might be feeling. Discussing how you resolved your situation can also provide hope and demonstrate that overcoming debt is possible.

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Options for practical support

Providing practical support to a loved one dealing with financial stress can help them on their journey toward regaining stability. One effective way to assist is by helping them access professional resources. Many people are unaware that free credit counselling services are available at local non-profit organizations. These organizations offer guidance on budgeting, debt repayment strategies, and money management, equipping individuals and families with guidance and resources as they work to improve their situation. You can offer to research reputable services with them, ensuring they feel supported rather than overwhelmed by the process. Any reputable agency will also welcome you to attend an in-person or virtual appointment or phone call with your loved one should they want you there with them. Encouraging your friend or family member to speak with a professional can help provide solutions tailored to their unique situation, rather than general advice that may not be relevant.

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Another way to support them is by offering hands-on assistance with budgeting and exploring debt management options. Many people struggling with debt feel paralyzed by their financial situation and don’t know where to start. Sitting down together to review their income and expenses can help them identify areas to reduce spending or redirect funds toward debt repayment. You could each set a goal to spend less in a particular budget area. Moral support can make all the difference, and your own budget might benefit as well.

‘Loud Budgeting’ Can Help Improve Your Finances 

If they have multiple high-interest debts, discussing consolidation options or structured repayment plans might be beneficial. However, it’s essential to let them take the lead in making decisions — your role should be to provide encouragement and be a sounding board, not to take over their financial choices. Small, practical steps, such as setting financial goals or creating a simple expense-tracking system, can empower them to regain confidence in managing their money.

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Set boundaries when offering financial assistance

When offering financial assistance to a loved one, it’s important to set clear boundaries to protect both your finances and your relationship. Before lending money, take an honest look at your own financial situation to ensure that helping won’t put you at risk. If you decide to proceed, setting clear terms is crucial, and having a written agreement that outlines repayment expectations can prevent misunderstandings and potential conflicts down the road.

Helping Family Financially, When Has the Help Gone Too Far?

While it’s natural to want to ease their burden, be mindful that in reality, constant financial support could enable poor money habits rather than encourage long-term financial independence. Instead of simply providing funds, consider offering practical support with acts of service, such as babysitting, meal prep, or planning no-spend entertainment events. Your goal should be to provide temporary assistance while empowering them to take control of their own financial future.

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The bottom line on helping a friend or loved one with money problems

Recovering from debt problems takes time, and having a patient and encouraging friend by your side can make all the difference. However, supporting someone through financial hardship can be draining, so it’s crucial to set boundaries and practice self-care. If your friend or family member is resistant to exploring debt relief options directly, help them improve their financial literacy skills. Canadian books or blogs, workshops, webinars, and online courses about budgeting, saving, credit, and debt management can provide the tools they need to make informed decisions. As they learn new money skills, celebrate small victories with them. By providing steady, empathetic support while empowering them to take control, they can look forward to a brighter financial future.

Related reading: 

Government of Canada – Canadian Financial Literacy Database

3 Ways to Help Family or Friends in Financial Trouble

How to Back Out of a Financial Commitment with Family Gracefully

Peta Wales is President and CEO of the Credit Counselling Society, a non-profit organization. For more information about managing your money or debt, contact Peta by email, check nomoredebts.org or call 1-888-527-8999.  

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