Friend in financial hardship

[Rosie5060]

Hi all, I’m looking for advice on how to help my friend who is going through a really hard time financially following the pandemic.

My friend and her partner had second child in March, her partner is self employed and hasn’t had work for 3 months now. Her maternity pay is the minimum as she only worked part time.

They are now 3 months behind on rent, council tax, bills and have used store cards to buy baby items as they are cash short. Mounting to a few thousand pounds worth of debt.

There is another side to this - my friend isn’t particularly good with money. If she wants something she will get it even if she can’t afford it, on store card or finance for example. So on the outside they appear to be ok.

I really want to help especially as they have a new baby and would really hate to see them go without. But would my efforts help if they have bad spending habits? How can I help in a constructive way? It seems to be a constant cycle of them always being skint.

It's tricky. Some people just aren't great with money. I know a couple who earn £100k plus (and have fixed outgoings similar to mine on a £25k salary) and are up to their eyeballs in credit card debt. They have to have whatever they want and it's all on credit.

Having said that, at the moment your friends are having a hard time. Self employed, new baby COVID etc.

What are you thinking? Financial help as a loan?

If you start giving them money or paying bills or buying food, they won't start managing their money better, they'll start thinking ooh, I can get this this and this cos my friend will buy me some food/pay my gas bill.

You won't break the cycle. You will enable it.

Hard as it is, the best thing to do is nothing if what you want is them to sort out their priorities.

Helping in a constructive way is great. Suggest places they can go for free financial advice, info on how to make budgets etc

They really need to speak with a budgeting service. When does he think his work will pick up? Can you speak to her kindly & say she needs to rein in the spending, there is a new baby to think of now & the priority must be rent, bills, food...not all that is shiny & new. Also, do friends/family have the usual stash of baby clothes/equipment ready to pass on to the newest member that will stop them having to buy everything themselves. I think there is little you can do until they change their spending. If it was the case that everything was gone on rent/bills (necessities) & baby items/food bill was v tight, I would think maybe you could do a big food shop (if you cd afford it) & say you were saving her the queues with new little baby & then refuse the money for it.... but that does not seem to be the way it is here. Hopefully things will go back to normal soon for them in terms of income...but it can take a long time to get out of a financial hole without a strict budget in place...

Absolutely do not lend them money. If they are both out of work they will be entitled to benefits to pay rent, council tax etc. If you decide to lend you cannot determine how they spend it and by the sounds of things, not likely to get it back.

Encourage them to get in touch with a debt advisory service. Be careful as there’s a few who sell themselves as that but are really more like loan sharks. CAP (Christians against Poverty) is a good one that I have seen help lots of people. Though suspect they may have a long waiting list at the moment.

He needs to claim universal credit and council tax reduction, and should have done so months ago. UC will include housing costs to cover at least some of his rent, possibly all depending on their circs. Research local food banks and assistance for young families, eg poss Sure Start, or the local family centre who might help with clothes and nappies.

I wouldn’t lend them money either but I would buy things for the baby. So when I went round I would take an outfit and nappies probably

Get them to contact CAP ( Christian s against poverty) you don't need to be a Christian or by faith at all. They do up a plan to get people out of debt, help with budgeting etc.

Are they claiming any benefits they are entitled to like Universal credit or they may already be on tax credits ?? Has her partner looked into the self employed grant ? Uc can provide a pretty generous top up and works well for employed people which your friend would still be classed as if on smp.

I definitely won’t be lending them money. I also do not think giving them cold hard cash is going to go far with them or help their situation.

So far I’ve bought a couple of outfits for baby in a bigger size and was thinking of maybe buying pick pack or nappies/wipes/formula? That way I know baby isn’t going without.

Me and my partner are the complete opposite, we work really hard to save, we’ve never had anything on finance, if we can’t afford it we don’t have it. We are in a really good position money wise because of this.

They did pay off all their debts last year so they could have a fresh start when baby came so there is hope. But they have got into bad habits again, £150 trainers on store cards etc.

Things they need to look at - I don't need to know the answers to these questions, but it's what they need to think about and what you could help them with. Glad you're not going to give them any money, because it absolutely sounds like it will fall into a bottomless pit.

Has he applied for the self employed grant, and the second portion that will be available soon? Have they taken all available payment holidays on council tax, card payments etc?

When do they expect the DPs work to pick up again? If it's not any time soon, can he get work in a different sector - for example, my DP will earn nothing in his main industry (festivals and concerts) any time soon, so he is currently driving machines on a building site instead. He couldn't get the SE grant because he was on PAYE with one of his main clients during the qualifying years. Can she go back to work full time ASAP and he be the main carer if he's not working?

But they must address their spending, or else the debt will become unmanageable, if it hasn't already. In that case they would probably need a formal solution, like a DRO or even bankruptcy, which may be a blessing in disguise as they will be banned from credit for several years and will be forced to live within their means and learn to budget or do without. But that is an extreme solution and they need professional advice from someone who knows their full circumstances so they can find out whether they just need to cut back on none essentials (easier said than done by the sounds of it) or a more formal solution.

As always, Moneysavingexpert is a great resource in these circumstances. As well as help with budgeting, there's links to all manner of coronavirus/money related help.

DP went back to work this week. Apparently he hadn’t filed last years taxes so couldn’t apply for the self employed grant. I am intending on speaking to her about UC as I think they could make a claim.

Back to offering help - so the general consensus is don’t offer help and offer financial advice instead?

Apparently he hadn’t filed last years taxes so couldn’t apply for the self employed grant

FFS, that was due by the end of January and people were told that if they got it in by some time in April they would still be allowed to claim the SE grants.

If that's the level of financial mismanagement in play, it sounds like getting anywhere with them will be an uphill struggle. You can lead a horse to water and all that. Unless they have learning difficulties or extreme stresses like a disabled child, I struggle to have sympathy for people like this. I know being a grown up is boring sometimes, but some things are rather important.

I know, it’s tiring hearing about it let alone living it. When she tells me about their lack of income and tight food budget I really do sympathise.

Sounds like I’m being a bit soft thinking they need help when they really just need to sort out their own finances.

What a lovely friend. I would just sign post her to help and IF you give any money i wouldn't expect it back.
I would recommend biting your tongue back on mentioning their frivolous spendings

If it was me, I’d be signposting to debt advice and benefits as a priority plus taking the occasional “gift” for baby or “made some scones, thought you might like some” or “saw these strawberries, they looked so good I bought you some” so helping out at low cost to you and not in a way they can rely on it such as taking them a week’s shopping.

CAP also run the CAP money course which is really good and if someone isn’t willing to go the whole hog and get debt help they might still be willing to do that to help them improve their budgeting etc.

There's also StepChange Debt Charity who have a huge amount of information and advice on their website and offer 'free, confidential and expert' advice over the phone.

I really do sympathize, OP. I have to watch every single penny just to get by while a friend of 20 odd years who has an income 6x the size of mine is constantly skint and constantly stressing and moaning about money. Oddly enough, I haven't spoken to them for a while! I'm guessing they haven't taken control of their finances and probably never will. It may be there's only so much you can do to help your friend.

It is tricky. If it was me I might get them a supply of nappies and wipes. It does sound as if they have got themselves into a financial mess. And sometimes it doesn't even depend on size of income.

I would buy nappies for someone who was buying £150 trainers 🤷🏻‍♀️
Not until they actually didn’t have any money (or credit) for nappies.
They need to hit financial rock bottom - or list to the advice you signpost them to, because you won’t be there to buy everything their baby needs.

I wouldn't get involved OP. By all means signpost your friend to UC and a debt charity like StepChange but don't get involved in the likes of taking stuff round for the baby. You hit the nail on the head when you said they just need to sort out their own finances.

You could see if your friend wants help with budgeting and getting better at handling money, but you can't help them if they don't want your help, and I bet they don't unless it's cold hard cash!

Even if you were mad enough to pay off their debt and all their bills etc guarantee you'll get pissed off when you see them buying baby £150 trainers in a few months time.

They definitely need to put in a claim for UC, it's not much money but it will pay something towards their rent and give them enough to feed themselves.

I would also look at local schemes which have been set up during lockdown, my community centre does a fruit and veg box for £3 right now and another organisation has formed providing food, kids clothes, toiletries and cleaning stuff.

I'd signpost to services only. By all means, do some research but don't provide any money or goods. If they can buy trainers they can buy nappies. If they can buy trainers but won't buy nappies, that's a case for child services.

Unfortunately these type of people will not change until they have to.

You can give them advice about how to manage their debt and money, but until they can not get anymore money from either lenders or friends and family will they start to change.

One of my mantras is that you shouldn’t care more about something (health, money etc) than the person affected.

So they are prioritising £150 trainers over basics for their child and not caring enough about their finances to do their tax on time. That’s a very low bar and really it seems they couldn’t care about it much less and maybe they do need to hit rock bottom, I know it’s hard because of the baby but what they need is help realising the reality of where they are and things won’t improve until they take responsibility.

The baby does have nappies and clothes (bought on store card) as they are cash short. I thought nappies or formula might be a way of helping with baby without giving cash, I know I can’t change them but this is a good friend and it’s hard to see as I adore her kids too.

KellyHall you have taken my words out of context, I am not describing a neglected baby. The child is cared and provided for but they are in a financial mess and making bad choices with money.