Millennial Money: How to help loved ones deal with debt

Sep 27, 2022, 4:00 AM | Updated: 6:44 am
The likeness of Benjamin Franklin is seen on U.S. $100 bills, Thursday, July 14, 2022, in Marple To...

The likeness of Benjamin Franklin is seen on U.S. $100 bills, Thursday, July 14, 2022, in Marple Township, Pa. Debt can derail a person's financial goals and take a toll on their mental health. And if they've been turning to you or others for money, those struggles can spread quickly. But as a close friend or relative, you have the potential to set them on the right course. (AP Photo/Matt Slocum)

(AP Photo/Matt Slocum)

Juan Pinon, an electrical engineer in McAllen, Texas, struggled with credit card debt for years. It wasn’t until he confided in his sister that he began to turn things around.

“It just so happened that one day I opened up to my sister, and she confessed to me that she had debt issues and was able to get out through professional help,” Pinon says.

Getting a vetted referral to a nonprofit credit counseling agency and encouragement from someone he trusted convinced him to take action. Pinon enrolled in the agency’s debt management program and paid off about $50,000 in less than three years.

It’s difficult to watch people we care about struggle with debt. Debt can disrupt their financial and personal lives, as well as the lives of those around them. As a close friend or family member, your influence can be powerful enough to spark change. How can you help others avoid falling further into debt, especially as the expensive holiday season inches closer? Here’s what you can do to help a loved one deal with debt.


Unlike Pinon, people with debt won’t always raise the issue themselves. Bringing up someone else’s personal financial matters can feel like overstepping a boundary. If you think it’s important to intervene, be strategic about setting the right tone.

The first step should be asking if they’re open to the conversation, says Kathryn Ellywicz, a marketing and communications specialist and former counselor at GreenPath, a nonprofit credit counseling agency. Giving them a choice may prevent them from feeling ambushed.

If they’re willing to discuss their debt situation, speak kindly and withhold judgment. “A lot of times, our family members feel shame around financial debt. So it’s a conversation that needs to be entered into very carefully,” says Brandy Baxter, an accredited financial counselor in Dallas. “It needs to have a lot of grace, and it needs to be in an environment where the person feels relaxed.”

If you’ve been in a similar position, consider telling your loved one. Drawing on your own experience with debt and acknowledging the emotions involved can help you come at it from an empathetic place.

“We can use ourselves as an example to say, ‘Hey, I was there, I understand. I’m not trying to put you on the spot. I myself went through this embarrassment. Please let me help you,'” Pinon says.


Your friend or family member might shut the conversation down. That’s OK.

“Debt can be addictive, just like any other addiction. The person that’s in the cycle may not see anything wrong, and so they may not be ready for help,” Baxter says.

Ultimately, you have to accept that it’s their life and their decision. Let your friend or relative know you respect their choice and you’ll be ready to help if they change their mind.

Baxter says you can also use this as an opportunity to reset boundaries. If you’ve been providing financial support for them and no longer feel comfortable doing so, explain the circumstances and ask them to respect your decision in return.


If your loved one is ready to dig out of debt, help them take the next step. You can talk to them about the emotions that might be influencing their spending behavior, explore different debt payoff methods or look over their expenses.

“Maybe you come together and say, ‘OK, here’s how I do my budget. Let’s work on how you do your budget. Or here’s how I’ve set up my spending plan. Let’s work on setting your spending plan,'” Baxter says.

But not everyone feels comfortable letting their friends and family dig into the nitty-gritty details of their financial lives. Besides, not all of us have the necessary expertise to take a do-it-yourself approach.

“Of course, there’s always the professionals available to help,” Ellywicz says. “Sometimes, even just giving a referral is a lot of help to a family member.”

Come prepared with a list of trustworthy resources, such as online tools, nonprofit organizations and financial counselors. (Nonprofits, such as credit counseling agencies, typically offer lower-cost or free services and meet certification requirements for quality and ethical standards.) Then, pass along your recommendations.

Here’s a start: The Association for Financial Counseling & Planning Education offers free virtual financial counseling and coaching sessions. If your loved one is struggling to pay bills or afford basic necessities, they can call 211 or visit to find local assistance.


As the holiday season approaches, your loved one may feel increased pressure to splurge. Do your part to not add to their existing debt and discuss keeping plans simple.

Baxter suggests looking for alternatives to gift-giving that will “lessen the financial burden,” such as volunteering to host a special dinner or exchanging gift cards with a set dollar amount.

Keep the momentum going and check in with them throughout the year. Debt payoff is a journey, and the journey may be a little easier with you by their side.


This column was provided to The Associated Press by the personal finance website NerdWallet. Lauren Schwahn is a writer at NerdWallet. Email: Twitter: @lauren_schwahn.


NerdWallet: What is debt and how to handle it

Association for Financial Counseling & Planning Education: Find an accredited financial counselor

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Millennial Money: How to help loved ones deal with debt