Anyone can end up in financial trouble these days. For all you know, one of your dearest friends could be on the brink of serious financial trauma. In which case, it’s your duty to help them through it. But helping financially isn’t always an option, so what do you do then?
There are many ways in which one of your friends can end up in trouble. Perhaps they’ve taken out a payday loan, or a larger long term one, and can’t keep up with repayments. Or, their house suffered severe damages that cost a lot of money. Either way, they’ve fallen into an endless debt spiral. They owe money to different people and aren’t financially independent. Eventually, they may come to you for help and guidance. At this point, there are plenty of things you can do to help. You can provide them with a cash gift to help boost their income for a month. In some situations, that’s all your friend needs to pay off debt and get back on top of their finances.
If their troubles run deeper than that, you can always give them a personal loan. Another possible way is, if you can, to employ them part-time to help them get more income and pay for things they need. Then, you have other ideas that don’t involve providing them with money. You can create a budget for them, and help them pay bills on time. Alternatively, you can look around for professional financial aid to assist them even further. However, be careful not torisk your friendship.
How to Help
As you can see, there are lots of ways you can help a friend that’s in financial trouble. Of course, all of these ideas are more detailed than what’s written there. So, here’s a breakdown of all the things you can do to help your friend in need:
Helping Financially With a Cash Boost
This idea is perfect for friends that need a quick fix. It’s common for people to be in a situation where they need money, fast. They may require a small sum of cash to pay off a little debt, and help them gain financial independence. Without it, the little debt slowly becomes bigger and more problematic.
A cash boost is perfect for them because they don’t have to pay you back. Now, some of you may wonder why you’d do this. Why would you give away your money to someone for free? Well, they’re your close friend, right? Surely you want to do everything you can to help them out. Plus, payment can be arranged by other means. Maybe they’ll agree to take you out for dinner as a thank you? Or, they say you don’t have to buy them a birthday/Christmas present this year. You should reserve cash boosts for close friends in need of quick financial assistance.
Personal Loans
If you don’t feel comfortable giving money away for free, then you can make it a loan instead. Lend them the money, and agree that they have to give it back as soon as they can. Your friends will prefer this over traditional long or short term loans for multiple reasons. Mainly, they don’t have to pay interest if you don’t want them too. So, they save money.
A loan is a good idea if you trust your friend, and they need financial assistance. It’s a quick fix, and can help people get out of debt.
Employment
There are scenarios when your friend is in financial trouble because of unemployment. In which case, you can try and offer them a job. If you run a business, you can see if there’s a job available for them. Or, you can have words with your employer to see if vacancies are available.
Employment is a long-term fix, and your friend will appreciate it greatly. Plus, you can still use this idea if unemployment isn’t an issue. Pay them to do jobs for you, so they earn the money they need. Some people prefer to do this, as it feels like they work for the money they get. They don’t like the idea of you giving them money without earning it themselves, but they’re happy to not have to apply for loans for the unemployed to get them through the month.
Budgeting & Paying Bills
If you don’t want to give your friend any money, then you don’t have to – helping financially is great, but you can still help them in other ways. One of which is to help them pay bills by creating a budget. Sit down with them and go through their finances. See how much they can afford to spend, and assist them in reducing expenses. Ensure they save enough money to pay for bills each month. Then, make sure they can afford to pay off a bit of debt each month too. With a decent budget, they can do both of these things and still have some cash left over. If you can let them stay with you for a while, it would be a huge help for them – but only if you’re sure you’ll be ok with it.
Professional Help
As a friend, you might be unequipped to handle significant financial problems. Try all of these things, but they might be unsuccessful. If they are, then your friend is in severe financial trouble. In which case, the only thing you can do is look for help. Find them some professional assistance to get them out of this terrible situation.
Of course, the best way to help your friend is to ensure they avoid financial problems in the first place. Again, there are a few ways you can do this. The first of which I mentioned earlier in this article, budgeting. Help them create a budget and they’ll be in a much better place. It prevents financial problems as you limit your spending.
Secondly, you should teach them to save. Go shopping together and pick out cheaper items that are just as good. I bet a lot of your friends spend loads while food shopping as they buy branded items. Often, store branded ones are just as good and much cheaper. Sticking to the saving theme, help them open a savings account. They should start an emergency fund that can help them out of tricky financial situations.
Summary
Seeing a friend suffer from financial stress can be very hard. You want to do everything in your power to help them, whether helping financially or with advice. Use the advice in this guide and online to assist your friends and help them regain financial independence. But, remember, prevention is always the best approach. If you can prevent financial problems from occurring, then you won’t have to worry about fixing them!
