Talking about debt: How to have honest conversations about money

Money worries can make us feel like we’re constantly running but never getting anywhere. Whether you’re struggling to make a dent in your debt, or too afraid to even think about it, taking the big step of talking to someone could be the best thing you’ll ever do.

Overcoming debt shame

Money conversations are difficult – for everyone. But when you add debt into the mix, it’s completely normal to experience those horrible feelings of guilt and shame. Whether that’s a product of our culture, our upbringing, or something else, it’s extremely common. Unfortunately, feeling bad isn’t the end of the story; that embarrassment can stop us from speaking up and facing our problems.

As recently as 2021, a Families in Australia Survey found that 70% of people were concerned about their financial future, and 20 per cent had asked family or friends for financial help. Those are big figures and give a sense of just how common it is to experience money worries.

As interest rates rise and the cost-of-living soars, those money worries have escalated. It’s an increasingly scary time for a lot of people; in Australia there are a whopping 7 million buy now, pay later active accounts – and we know people are using it to cover basics like food and fuel.

When life throws a curveball, the reality is that anyone can fall into financial hardship. Whatever the reason for your debt, don’t let it stop you reaching out for professional help.

Why we need to talk about debt

Admitting that you’re not feeling confident about meeting your debt repayments isn’t a failure, it’s one of the most important steps you can take.  But time is of the essence; the longer you procrastinate, or struggle to manage it alone, the bigger the problem can become.

Importantly, we need to recognise that debt isn’t just a money matter. Financial stress can take an enormous toll on our bodies and our minds. That burden can make us lean more on cigarettes, increase our drinking, or hide from reality with drugs; it can even trigger or worsen depression and anxiety, and lead to thoughts of self-harm.

It’s a truly awful cycle, but one we can start to break when we bring our worries out into the open. When we’re honest with ourselves about debt, and willing to seek the right help, we can strip away that pointless shame and guilt and create a pathway out.

In all likelihood, you won’t be the only one in your circle suffering, but – if it’s appropriate for your circumstances – you could be the one to start an important conversation. By telling trusted friends and family that you’re cutting back on spending, you could open the door to more mindful choices for everyone. That might mean boiling the kettle at home instead of meeting out somewhere for coffee, dialling back the birthday budget, or accepting a bit of FOMO in lieu of yet more financial stress.

Signs someone might be in debt

If you’re starting to suspect someone you care about has money management issues, and want to support them to take action, keep an eye out for signs they might be falling into debt:

  • Do they frequently use credit cards or BNPL?
  • Are they avoiding opening bills or checking their bank balance?
  • Has their mood changed, or have they withdrawn socially?
  • Do they seem to be spending more than they earn?
  • Are they borrowing from friends and family?

Whether they’re burying their head in the sand, hoping for a financial miracle, or too embarrassed to share their situation, inaction is not a solution.

Get help to overcome your debt today.

How to talk to your partner about debt

Money worries aren’t just one of the main sources of stress in Australia, they’re also a leading contributor to relationship breakdowns.

If debts are weighing heavily on you, money worries are probably already taking a toll on your relationship. You might have difficulty sleeping, feel angry, worried, or moody, fatigued or withdrawn. If any of those sound like you, and it’s right for your circumstances, sharing your concerns might allow your partner to provide important support.

Before you start that conversation, it can be useful to think through exactly what your partner might need to know, including:

  • The sources of support you’re accessing, and any guidance you’ve already received, to reassure them that you’re taking steps to tackle the debt.
  • What this process will mean for your credit report.
  • Any timelines you’ve established for repayment, so they can see light at the end of the tunnel.
  • Ways they can support you, including practical cost-cutting steps.

Equally, if you suspect that your partner has money problems, you might need to be the one to break the silence. Being financially out of control can provoke intense anxiety, so it’s crucial you approach the issue sensitively and constructively. Wait until you’re feeling calm and able to communicate your concerns clearly, and then try to speak in collective terms like ‘we’, ‘us’, and ‘our’ to avoid a sense of blame.

By problem-solving together, you can agree clear expectations and boundaries – everything from what constitutes ‘essential’ spending to who is taking responsibility for next steps. Then set a timeline to revisit and check on progress, because debt is never a ‘one and done’ scenario.

If you’re fearful that telling your partner about your debt could put you in danger, it’s important to seek out specialist domestic and family violence support. Call 1800RESPECT to connect with a team of trained counsellors.

Talking to children about money worries

While you don’t want to scare or burden children with your financial woes, it is important to help them develop a good money mindset by modelling how to manage financial challenges responsibly.

1. Be direct

If you can’t afford something, explain the situation factually, without emotion and without giving any sense that you or they will be ‘missing out’.

2. Teach them to budget

Teach kids the difference between ‘want’ and ‘need’, and lead by example in your own spending. For young children, everything feels like a need, just because they don’t have the understanding or emotional regulation to understand otherwise. It’s our job as they grow, to use that vocabulary intentionally, so that they understand the difference between our miscommunicated ‘need’ for a morning coffee and our real ‘need’ to pay the electricity bill!

3. Manage your budget together

Make reducing costs, and negotiating budget items, a whole family activity.

Children are incredibly receptive to stress, so it’s better to share information responsibly rather than pretending everything is fine, or ultimately overshare when the worry gets too much.

Set their expectations about how you intend to get on top of your money worries, for example Friday night toasted sandwiches rather than pizza, mum/dad picking up some extra shifts, or holding off on some planned purchases.

With support from Way Forward’s specialist Financial Hardship Advocates, you can reassure your family that you have the power, and a plan, to fix your finances.

Get help to overcome your debt today.

How to repay debt

It can be all too easy to miss a payment or struggle to make ends meet, but the key is to take control of your debt before it takes control of your life.

Work out the total you owe

The first step is always facing up to the reality of your situation. That means opening those scary envelopes or emails, or connecting with lenders to get the full picture of what you owe, whether it’s to the bank, on credit cards, BNPL, store cards etc. If you don’t have recent statements, you’ll need to get some.

Don’t let your worries hold you back from contacting your lending organisations – by stepping up and making contact you’re taking those critical first steps towards repayment, which is in everyone’s best interests.

If at any time you need additional support, get in touch with a Financial Counsellor to step you through the process.

Create a budget

From there, you’ll want to take stock of your day-to-day finances. You can use our free budgeting tool to help you understand the detail of where your money is going, and any areas where you could potentially cut back. No matter how big or small, any savings you make could help you to begin tackling your debts.

Negotiate a manageable repayment

Our Financial Hardship Advocates are experts in working with lenders. We’ll work with you to calculate a manageable, but reasonable, repayment arrangement -making sure you don’t commit to a sum you really can’t afford. Then we’ll speak to your creditors’ hardship team about a hardship variation and agree a plan that will help you get on top of your debt.

Where to go for help with debt

Sometimes the mountain can feel too big to scale alone, in which case it’s important to reach out for expert help.

If you have unsecured debt from credit cards, personal loans or payday loans, but are earning an income, we can help you to get your finances back on track.

Most people desperately want to clear their debt, but just can’t afford their regular payments. We work to reduce the repayment to an affordable amount by asking creditors to consider reducing or stopping interest, waiving fees and charges or reducing the overall debt.

Get help to overcome your debt today.

Way Forward can help if:

  • You have debts with multiple organisations.
  • Your financial situation is likely to remain the same in the near future.
  • You have a regular income, and have money left over after you have paid your expenses each week.

Our specialists provide free debt advice and financial support, including handling creditors, negotiating repayment plans between you and your creditors and providing debt relief. Crucially, as an Australian registered charity backed by Australia’s biggest banks and lenders, our service is completely free of charge.

We’ve helped hundreds of Australians and their families to get on top of their finances. No matter how difficult it may seem, there are solutions to every debt challenge. Ignoring debt, on the other hand, only ever makes the situation worse.

Together we can work to create a realistic budget that allows you to make a regular, manageable payment towards reducing your debt.

Contact the team today to talk about your debt worries and begin building a better financial future.

Get help to overcome your debt today.