Often Overlooked Signs That Someone Close To You Is Struggling Financially

The Federal Reserve Bank of New York reports that household debt grew to $17.8 trillion in the second quarter of 2024. In that time, mortgages were up by $77 billion, while auto loans grew by $10 billion and credit card balances by $27 billion. In a study by LendingTree, published in June 2024, the median non-mortgage debt across four generations — baby boomers, Generation X, millennials, and Generation Z — was $24,668. Gen Xers held onto the most debt among the cohorts at $33,859, followed by millennials ($30,558), baby boomers ($18,779), and Gen Zers ($16,562). (Speaking of which, the anticipated great wealth transfer may prove disappointing, especially for millennials.)

These statistics suggest you might know somebody close to you who's struggling financially. Odds are, they don't want you or anyone else to know that, though. While it may seem unlikely that people making a decent income face financial difficulties, this is actually what makes it easier for them to hide their struggles from their family and friends. With that in mind, there are signs you can be on the lookout for and take note of, rather than overlook because you think someone close to you couldn't possibly be dealing with money problems of their own.

It's said the three things people should avoid talking about over dinner are politics, religion, and money. That being said, if someone close to you starts to avoid conversations about their finances, it could be a sign they're dealing with some financial difficulties.

Beyond avoiding talking about money, however, they may also become defensive about things like recently canceled plans or perhaps big purchases. As counterintuitive as it may seem, overspending is another sign that someone may be struggling financially, as they attempt to keep up the pretense that everything is fine. However, if they are spending beyond their means, it's most likely being done with credit cards, which will only lead to more debt and worsen their money problems. (On that note, keep in mind that relying on credit card usage is among the bad money habits you should stop before you go broke.)

Again, signs to look for include an evasiveness about personal finance (e.g., how were they able to afford a new car), as well as a tendency to become nervous, angry, or out of character when money or spending is brought up in conversation. If you see such change in behavior, don't dismiss it or drop it in an effort to avoid conflict. Financial difficulties are something that can often be worked on and overcome together.

It's well-known that worrying over money can take its toll on a person's mental health. For this reason, observing some of the signs of decreasing mental health, and consequently physical health, could help you realize sooner than later that a person close to you is financially struggling.

A 2023 study by Forbes Advisor on the impact of debt on Americans' mental health found that of those surveyed, 54% said that debt was a source of stress for them, while 60% said that stress had led to disagreements in their relationships. Mental health consequences of this financial stress included higher anxiety at 40% and depression at 34%. Meanwhile, 38% of respondents said their social lives had suffered as a result of their debt problems. This last statistic goes back to the easily overlooked sign of people suddenly canceling plans, oftentimes at the last minute to give the illusion that they would've made it otherwise and to steer family and friends away from the fact that they actually canceled in order to avoid spending money they didn't have.

Further, 48% in Forbes' survey said their debt problems resulted in sleep problems. If you notice someone close to you is suddenly always tired, it's possible it could be due to growing stress over money and/or debt, especially if you notice other signs as well, like anxiety, depression, or becoming withdrawn. If it is related to debt and money management, unfortunately, this may only compound the individual's financial issues. As consumer credit reporting agency Equifax notes, negative effects from debt worry can make it even more difficult for a person to deal with their money problem(s) alone.