Money is a sensitive topic; it can trigger guilt, shame, and fear of judgment, making it easier for people to sweep such discussions under the rug. However, money matters are too important to ignore, which is why watching a loved one go through a financial crisis can be almost as torturous as undergoing it yourself.

Perhaps you can no longer bear watching your loved one make poor money decisions or struggle through a financial crisis. On that note, here are useful tips on how you can help someone with financial struggles, the triggers to avoid, and meaningful contributions you can make without being an enabler or hurting their self-esteem.

How to approach the topic.

As already established, money matters can be embarrassing. Perhaps, this is why your friend, partner or family member is yet to approach you. So, before having a conversation with them, you will need to lay the groundwork for a safe space where they will feel comfortable sharing their financial difficulties with you.

• Be certain that there is a problem. 

Money topics are often treated as taboo; therefore, it will be pointless to create an awkward situation by making hasty conclusions. Instead, ensure that you gather enough evidence that is built on more than one red flag.

• Share a relatable story.

If it seems like your friend is willing to talk but they feel awkward, you can demonstrate empathy by talking about your past financial struggles and how you handled them. By sharing your story, they are likely to feel less guilty and more open to assistance. However, remember to make your story and suggestions as relatable as possible to avoid coming off as judgmental or unrealistic.

• Watch your tone.

When discussing sensitive matters, your tone is extremely important. No doubt, you have a responsibility to caution your loved ones if it seems they are making bad financial decisions. However, try not to be a school teacher. Instead, approach them as a companion who wants to genuinely help and not as an ‘I know it all.’ 

• Be empathetic.

In many cases, people lack empathy for people going through financial hardships because they believe it is their fault, forgetting that unexpected emergencies like medical bills, death, and natural disasters can affect financial security. Therefore, avoid phrases like ‘You lack the willpower,’ ‘You should have taken your studies seriously,’ or worse, ‘I told you so.’ Not only will these phrases make you judgemental, but they also reduce your loved one’s confidence in your capacity to understand their struggles.

Ways you can help.

While talking is a good place to start when a loved one is going through a financial crisis, you should also be willing to help. On that note, here are five easy ways you can assist.

1. Cash gifts.

Cash gifts are the most straightforward way to help someone struggling with a financial crisis. It is an excellent option if their issue is a short-term or a one-time occurrence. However, apply caution. We know watching your loved one struggle hurts, and you want to help, but remember not to put yourself in jeopardy while at it. So make sure you give an amount that you can afford.

In addition, there is no point tagging it as a loan to make them feel better- it will likely make things more awkward, and they will feel indebted to you. So instead, let your loved one know it is a gift, and if they are reluctant, you can add that you would appreciate someone making such an offer if you were in their situation, and you are hoping they can pay it forward.

2. Help them create a budget.

Sometimes, people who struggle financially do not know how to track their expenses properly – they simply do not know where their money goes. As a more experienced budgeter, you can offer to share your budget with them and explain how budgeting helps you make sound financial decisions.

For instance, if you have a family member who is always in need of money, offer to assist one last time on the condition that they allow you to show them how to budget. This approach will either do one of two things – anger them or make them agree. Of course, a person looking for genuine help will always agree, but those who get angry are usually trying to manipulate and guilt-trip you.

3. Offer services.

When people think of helping someone in financial need, we often think of cash or monetary gifts. But, on the contrary, there are several non-monetary ways to help a loved one with financial problems. These include offering to babysit (if they are a parent) to give them sufficient time to run errands, take up a new job, or save costs on paying a babysitter. 

Also, offering to be an accountability partner, helping them network and job search, and pointing them towards local resources like a credit therapist or financial coach are great non-monetary gifts.

4. Invite them over for dinner.

This may seem small and almost irrelevant, but it is one of the most cost-effective yet affectionate ways to care for a friend in a financial crisis. Besides, this tip comes from a personal experience, from when I was a student and broke. I had a friend who would invite me over for dinners – this gesture afforded me a mental break from thinking of what meal to make and provided me with good company and laughter.

5. Give a personal loan.

It is not by chance that this is the last point because loaning loved ones money has been the cause of death of many friendships and relationships. Therefore, this should be a last resort. 

Remember to talk frankly and concisely about the loan terms, document them and have both parties sign. This will help ensure that both of you understand the financial arrangement. Some terms to note are the loan amount, the interest you will charge, and how it will be calculated, payment structure and due dates, and the consequences for failure to repay timely or in full.