Are your loved ones coping financially?

At this time of year money can be tight, what with the extra costs of Christmas and increased heating and electricity bills.

The chance of financial pressures creating problem debt is more common than you might think. Money Advice Service research found one in six adults are at risk of crisis debt— that could very easily be someone you know, perhaps even your children.

To make matters worse, only 20 per cent of those likely to be at risk actually acknowledge the problem and seek help. So how can you be of assistance without putting your own finances at risk?

It isn’t always easy to know when people are struggling with money. They might actively try to hide the problem, but there are a few symptoms of debt you can look out for.

Do they seem anxious, withdrawn or depressed? Do they appear to have trouble sleeping or has their weight changed suddenly? If you spot any of these, it’s likely to be a sign that something is wrong, though not necessarily financially.

But coupled with the following, it’s very possible it’s money causing the problems: have they suddenly changed their spending habits? Are they making excuses to avoid spending money? Or are they living beyond their means?

Ask yourself if there’s been a recent life event that’s likely to have put pressure on their finances—whether that’s having children, losing a job or a big, unexpected cost.

If you spot any of these signs, then it’s time to address the issue.

The best thing you can do is start a conversation. Helping them to open up could be just the trigger that they need in order to acknowledge their money problem and start doing something about it.

Make sure you don’t tell them off—the purpose is to help them get out of a bad situation rather than punish them. Sharing times when you’ve struggled can let them know they aren’t alone.

It’s tempting to help out financially. But you need to make sure you don’t borrow money or put yourself in a dangerous position to do so.

The odd tenner here and there won’t be a problem, but there’s a huge risk to your savings and your relationship if you lend larger sums or take out guarantor loans.

Rather than trying to fix it yourself, sometimes the best option is to get some free and independent debt advice. Direct them to charities such as Step Change and the National Debtline, or the Money Advice Service. The specialists there will talk to them confidentially and help them find solutions.