How Do They Afford That?Would you know if a friend or family member was having money trouble? If they asked for help, would you do it? Join Canna Campbell - a financial planner for 20 years - and Fear & Greed's Michael Thompson as they look at how to recognise the signs of financial distress, and how to help a friend or loved one in a meaningful way, without putting your own financial security at risk.
Need help? Visit the National Debt Helpline or call them on 1800 007 007.
The information in this podcast is general in nature and does not take into account your personal circumstances, financial needs or objectives. Before acting on any information, you should consider the appropriateness of it and the relevant product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant Product Disclosure Statement or other offer document prior to acquiring any financial product.
Canna Campbell is a Corporate Authorised Representative and Corporate Credit Representative of Wealthstream Financial Group Pty Ltd ABN 35 152 803 113 Australian Financial Services Licensee AFSL 412079.
Welcome to How Do They Afford That, The podcast that peaks into the financial lives of everyday Australians. I'm Michael Thompson. I'm an author and the co host of the podcast Fear and Greed Business News and as always, I'm with Canna Campbell, financial planner and founder of Sugar mam A TV, the financial literacy platform that you find just about everywhere that you can consume content podcasts like this one and Instagram and threads and TikTok and everywhere all over the place. Hello Canna, Hello. Can a serious topic today. It's actually a genuinely serious one and it's one that can be a little bit delicate at times. We're talking about what to do when you notice that somebody is in financial trouble. It might be a friend, it might be a family member, it might be somebody that you work with. And they might not have actually necessarily have confided in you that they are having trouble, but you might have seen some of the signs that they are struggling.
Or even intuitively pick something up.
Yes, yeah, yeah, just comments that they've made or something like that. So the question is kind of do you do anything, how much do you do, how do you go about it? So there's a fair bit in this, and as I say, a delicate one. Can we start with the warning signs, assuming that someone doesn't just come straight out to you and say, Hey, I'm in trouble. I haven't got enough money, I haven't got like I can't afford to pay my rent or something. What are some of the warning signs that someone that you know is in financial trouble?
Well, first of all, some signs can be quite subtle. Obviously some are quite obvious. So the classic one is changes in spending habits, so suddenly going becoming incredibly frugal, or even the opposite, actually becoming quite squndalous and trying to sort of keep up with the joneses.
Oh wow, that which there makes a problem so much worse, right.
Exactly just compounds. And then a classic one that I see quite a bit is people avoiding social situations, so they'll pull out last minute, or they'll perhaps turn up late, So turn up late to the restaurant so that you know when everyone's finishing their meal or just having dessert, so that they only order a dessert. Oh they'll say, oh, look, I'm going to drive so I'm not drinking at the moment, which of course is responsible and there's nothing wrong with that, but they will sort of delicately tiptoe around the problem at heart. And then obviously things like having to always borrow money, so asking for small loans out of the blue, and you're seeing that happening maybe on a regular basis, or you see them using their credit card to buy things all the time that you know isn't necessarily within their budget, or always using buy now, pay later. And then there's also the physical appearance, so this look of stress and anxiety. You can actually sometimes see that in people's face. They just look worried, they look worn out, they look stressed, and you know they might be quite short fused. They could be you know, looking like they're stressed about bills, or they could be quite irritable, and you know, this is one of the things about bearing their head in the sand. And then of course skipping payments, so completely ignoring any of their financial responsibilities or obligations.
There's a lot in all of that, but it's actually that's really quite heartbreaking, isn't it. Particularly I think the one where they change their behavior where someone is they're pulling out of they're not seeing their friends because they can't afford to spend money, or they turn up late to things to avoid kind of the meal or not drinking. That it almost feels quite shameful, exactly.
And there's nothing wrong with saying, look, I want to type bart it, or we've been hit with an expense. And that's the other thing to point out. Because someone's in trouble financially, people should never assume it's because of something they've done that's their own fault. Sometimes it's just a bit of just unfortunate bad luck.
I remember doing that once when this is a few years ago, and meeting up with a group of friends and the suggestion had been made, I will go to this restaurant, and I know it was a very very very expensive restaurant. And I actually messaged them separately and I was thought, you know what, I'm not going to kind of pull out or hide. I said, look at them, I can't afford it. Things are just a little bit tight at the moment, I said, I just don't have it in the budget to go to this restaurant, knowing that it would be a couple one hundred dollars per person to go to this place, and I just said, look, I can't afford it right now. And that person was like entirely accommodating. They said, actually, you're right, it is a lot of money, and no one has kind of spare money at the moment. Let's find somewhere else and we did.
Great, you broke the ice.
Yeah, absolutely, And I was just like, and I think that more than anything. Just told me that in so many cases, honesty is actually the best policy, and people will understand if you are honest.
You create a safe space for other people. Then to step up and say, actually, you know what, I'm the same boat, and this is an expensive restaurant. Maybe it's something that should be held off for a special occasion only.
Perhaps, Yeah, okay, So that's like, these are the signs. These are the warning signs. If you see this happening, what are you saying to them? And perhaps not kind of just coming out and saying it, What are you saying to them? Are you actually broaching the topic with.
Look, you've got to start with empathy and something nice, you know, complete and absolute care and compassion, and remember what is your objective here? It is to help that particular person so instead of saying, hey, I noticed you look stressed and you're struggling right now or you can't afford to pay that, perhaps something that's more gentle, like hey, I've been thinking about you, like how are things going, Or when you know that you're about to see someone, send a message and say, hey, I'm so excited about seeing Hey, I'm so excited about knowing that we're going to catch up and see each other. You know, I can't wait to hear what you've been up to. So you really make that person feel safe and secure and most importantly respected, So you know, perhaps you start to share your own experiences where there was a moment in your life where you were facing financial stress before, so you can make it really safe, in a non judgmental space for that person to open up and feel less alone. And the other thing I would suggest is asking open ended questions rather than just bombarding someone with advice, So things like you know, what can I do that might help you right now? Or is there anything that you can think of that would actually help reduce the stress for you? Instead of saying you should do this, or you must do that, or you need to do that. You know this is where you can just come with a completely different I guess energy and just come from a really kind, compassionate, understanding place, so that person does feel safe and they feel safe to open up and to download.
So really it's about not making them feel judged. It is about not making them feel embarrassed about it. It is making them feel like they have got someone that they can confide in.
Exactly, okay. And also listen, you know some people, some women, maybe they just need to like vent or download, and they don't actually want a solution because they're already working on fixing the problem themselves. They just want to be able to share what's going on and how they're feeling and how it's impacting them right now, so they're not actually asking for help necessarily. And another great question I think is really important is to ask them what are they doing to help themselves? You know, if they want any other ideas or tips or tricks that they might have themselves that could help that person get through this situation, because, as I said, sometimes in situations, people need to figure things out themselves. And you know, it sounds harsh, but that's when you figure things out yourself, that's sometimes where the best growth and you learn and gain the most amoutter of wisdom and you don't repeat that pattern again. So sometimes part of helping is actually stepping back and supporting them from the sidelines.
Okay, should you always try to help? Like? Should you?
Like?
I know that that is kind of helping, but stepping back right and making them know that the support is there if they need it. But also just kind of standing back and allowing someone perhaps to kind of work their own way through it. But should you always do something or are their circumstances perhaps where it's just best to stay out of it?
Okay?
And look, I know this is actually quite a delicate and tricky.
One because what I face all the time with people around me because obviously I'm a financial planner, and I can sit and see things, you know, professionally and personally, and I have to pick and choose when I you know, if it's appropriate for me to say something or not at all. But look, this is my from personal experience and professional experience. I really believe that you can't actually help someone who isn't willing to help themselves, because there are sometimes people in different phases of their lives that actually like to stay in a place where they are a victim. Being a victim feels comfortable. They don't know anything else but that. However, that definitely does not mean you don't support or encourage them or even disrespect them in any way whatsoever. Everyone has their own personal wake up call, and sometimes your rock bottom where you think all right, enough's enough is very different to what that other person's rock bottom is, where enough's enough, and that moment will come, but it will come at the time that's right for that person. So you definitely can't be necessary that person that pulls them out all the time because then become codependent. But you can definitely be the person that, as I said, sits on the sidelines and is the first person to cheer them the moment that time has come where they go, all right, I get what you've been saying, enough's enough. I can't live my life like this. I deserve better. I'm willing to do the work and help myself. Can you now help me? So we really need to respect that time, depending obviously how serious it is.
Okay, so there's clearly no kind of one set solution here is basing it entirely on the relationship that you have with that person, the details of their circumstances, how open they seem to be to receiving help, and just what you know about them as to what their personality is like and how much they will need from someone else and how much they're capable of doing themselves. How then do you make sure that you're offer of support if you are talking to them, is actually practical rather than just well meaning, Because the well meaning side of it is good just for them to know that you're there, right, But how do you actually physically help, physically help when it's you don't just want it to be kind of empty platitudes like oh it'll get better or yeah, you're okay, you've got this, like it's nice, but it's not going to actually do anything.
Right of course, So obviously there's practical things, so you can help to do a budget, say to that person, look, why don't we sit down together and do your budget? Or why didn't I come with you to see a financial counselor so that you've actually doing the work with them, holding their hand along the.
Way, And that kind of helps in a number of ways. If you offer to go and see someone with them, they've got emotional support they've got kind of someone almost holding them accountable in a way, kind of making sure that they get there and don't cancel that kind of appointment at the last minute. That would be a very, very kind of powerful thing to do.
And also you've got another set of ears in the room because you know the counselor or you know that budgeting experience. There might be a tip that gets missed by person who needs to help the most, and then they can gently remind them, Hey, don't forget that. You know that counselor said, this is very common. You know this is a great strategy to use. So it is again it's coming back to that place of care and compassion. But obviously you've got to be mindful not overstepping the mark. Obviously you can't be giving superannuation advice to someone who's really swiss about retirement. You need to understand a fay. That's probably where a professional steps in and you're offering guidance here, not control. So you don't want to be taking over their finances for multiple reasons. But this is all about helping them help themselves as well and having boundaries in place. You know, when they're ready to talk your talk, but if you get to a point where they're exhausted emotionally, mentally, even financially, that you know, Okay, all right, We're going to park this conversation for a while. And a big one I would say here as well, from a practical point of view, is protecting yourself.
I want to get to that in the moment as well, about kind of how you make sure those boundaries are in place to protect you as well, and also to talk about what happens if the person that you're speaking with that you have identified as needing some help is resistant to help and you are worried that their situation is just going to get worse and worse and potentially they are at risk. So there's still a bit to cover. We'll take a quick break and come back with more. Can We are talking about how to help somebody who is in trouble, in financial trouble, and we talked about the importance of approaching it from a really supportive place, that it is all about having empathy and it is about making sure that person doesn't feel judged and just feel supported. What happens though, if they don't want help, or if they deny that they are having issues because there is an element of embarrassment absolutely in this. What if they deny that there's a problem, do you just drop it?
Or what's worse, they you try and help them and they throw it back in your face. Well, they don't actually follow what you suggested at all and go down a completely different path that actually causes more damage. Yes, look, it is really hard, and this is where you've got to protect yourself. I had a recent situation where someone very close to me was in a lot of financial trouble and they came to me and confided to me, and you know, I spent hours going through a list of all the different things they could do to help fix the situation, and did the budget with them, did some goals with them to spoke about their mindset. And I spent hours and hours and hours, and I pulled all these special strings for this particular person so that they had this opportunity to make some extra cash and quite a bit of extra cash. And they did all those things, but then they went and bought a whole new wardrobe with all that money instead of actually dealing with the actual heart of the financial problem. Now that was really hard. There was such a mix of emotions there. I was angry, I was frustrated, I felt disrespected. Then I felt really sad becuse I could see this situation that was the exact problem at the first place as to why this person was in this situation. So you've got to know when to pull back and when to say, all right, I'm not of any help here. This person hasn't actually reached their rock bottom. So this is where you really need to respect their decision, keep the door open, let them know that you are still there to help. But you also just need to move on with your life. And you know, I really think there's a lot of power in leading by example. You don't necessarily need to say you should do this, or I said this is a great idea. You can sometimes you know, silence and success. You just get on and do your thing and mention now, yes, you know, I'm working on this financial goal right now, or I've managed to save up this much money so far, or I've finally paid off that credit card. Just lead by example, and you just peppering did all the things that you've managed to do and how it feels, and just talk about that and just lead by example. Over time, that person may wake up, But you can't help everyone. And that's what I've really had to realize as well, as a finance planner who's so passionate about financial illness.
Onto a rather sticky situation now, and that is family helping family or really close friends. Are there circumstances where you would ever give or lend money to people in order to help them through a situation or is this just too kind of high risk that you can end up kind of getting dragged into their financial mess as well? And I suppose if you do do it, how do you do it in a way that protects you again putting up these boundaries and trying to protect your own situation while helping them.
Personally, I would always help someone I cut and Tom and I both like that, and we've actually agreed that there are certain people in our lives that we will always find a way to help them if it got to that situation. And so if you do decide to do it, there are a couple of I guess agreed rules that you must have in place beforehand. Is Number one is you never lend more money than you can't afford to lose. So if you almost need to expect going to get that back, and if you do, that's wonderful. The other thing is, obviously, if you're in a relationship, you've got to check with your partner that you're both on the same page and you agree on the limit, you reagree on the terms, and that there are no more loans beyond that particular point. So there are some firm boundaries that you've communicated upfront and you've communicated to that particular person. If you lend money, also consider getting it written down to avoid any misunderstandings as to you know whether there's interest paid, or whether how long that money has to be paid back, or you know whether it can be paid in certain chunks perhaps, and.
To make it abundantly clear that it is in fact alone and not a gift exactly.
And at the end of the day, if you can't lend it, because it's going to put you at financial jeopardy, explain that back to the person to say, look, I would love to help you, but we're actually in a really tight situation ourselves. So by us helping you out, we're actually going to be you know, it's going to mean that we're going to default on this and that, and then that's going to happen, you know, certain repercussions, but also never forget you know, you can help someone not necessarily by throwing money at the problem. You know, it's that on monetary help can sometimes that actually be of greater value, you know, connecting them with resources like the National Deadline or for example, you know CBA's Next Chapter program, which is amazing for people who are suffering from you know, financial abuse. So there are lots of different ways you can actually help people without giving them money. And you know, like I know for times in my lives where my friends have sent each other quotes or funny means to help improve their mood as they're going through a particular challenging time. You know, you can't pour from an empty cup. So remember that, so that you have that firm boundary for your own protection when it comes to helping people.
And I suppose if the person who is approaching you is a family member, it does add a certain emotional element to it, Yeah, which you again need to navigate carefully.
Right, you feel so much more obliged to help a family member, Well, I certainly do think most than a friend.
Yeah, And so in terms of then of you mentioned a couple of results there, and it's probably a good place to kind of finish up where people can get help if they need to. And so I'll just get you to mention those ones again. But also, is it just a case of providing these details to someone who needs help, or is it kind of how do you kind of encourage someone to seek professional advice knowing that a professional is unless you are the person that they're approaching for help, a professional is probably always going to be able to give better advice than say regular person. Right, how do you get them to get that professional advice without them feeling pressured?
Well, this is the problem if they're not ready to get help themselves. I mean, you can take a horse to the water, but you can't make it drink. So you need to respect they may have not actually hit that moment where they go all right, this is my rock bottom enough, so I'm going to rebuild from here. That moment may just have not come yet, may in fact never come at all, and they'll just continue on living this life. Now, we need to respect that's someone's decision. They have a choice themselves. And I come back to this, I've helped so many people who then self destructed again. People need to learn how to help themselves and it is the best way to learn most of the time, not all the time, but most of the time. So you know, you've got to have your hand on your heart. So you've got to nowhere to support, where to listen, where to show compassion, where to step in, and of course where to just step out and sit patiently on the sideline. So you are the first person to cheer them, support them and encourage them the moment they say, you know what, I'm ready to help myself.
Okay, So those resources, the National Debt Helpline is a great one, great to start with, and look, the easiest way to get in touch there is to go to the website NDH dot org dot au. If you just google National Debt Helpline, it'll come up. And there are other resources like so many next next Chapter, through Combank and others.
A lot of the churches have free financial counseling as well, so there are lots of people out there who are willing to help you for free. And of course then you you great podcast like this one.
Yeah, you know, you've got books.
You can get from the library. There are lots of online courses you can do. There are so many things out there that are for free. They give you some really great financial literacy to help you get out of situation you're in, or help that person get up the situation they're in.
Yeah, in terms of the kind of the formal ones like the dead help line and those will put a few links in the show notes as well. Serious topic today, wasn't it?
It was? But it's an important one.
I think so, And I think everyone will have experienced this at some point, have identified somebody in their life who is going through Look, and let's face it, there are a lot of people going through financial trouble at the moment because everything is just so expensive. So hopefully there is something in here in terms of those signs to watch for, the things to watch out for, and even that very basic principle of help them do it from a place of compassion and empathy and not judgment and use those professional resources as the backup. And I really liked what you said about kind of leading by example as well, just kind of demonstrating kind of what you're doing and people will observe that, and it might be a more kind of tactful way or delicate way of kind of navigating through, but just be there for the people who need it around you exactly. Okay, Canna, where do we find you? If anybody wants more information.
The best place to get in contact with me is at Canna Campbell Official on.
Instagram and you can hear me every day with Sean Aylmer on Fear and Greed daily business news for people who make their own decisions. Thank you very much for listening to how do they are?
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