Struggling financially? Here’s what to do and where to find help

We can all agree it feels like a perfect storm, especially for people with already precarious bank balances. But you’re not – by any means – navigating it alone. With one in six UK households (4.4 million) now in ‘serious financial difficulties’, according to the abrdn Financial Fairness Trust, more and more people are worrying how to make ends meet. If you need help, there’s no shame in asking – there’s a wealth of information and support out there. We’ve distilled some of the best of it for this blog to help get you back on track.

What are the warning signs that I may be struggling financially?

What should I do if I’m in financial difficulty?

How can I avoid borrowing money to pay bills?

What can I do if money problems are making me feel low?

Where can I find help if I am struggling financially?

What are the warning signs that I may be struggling financially?

Most of us have had to count our pennies at some point in our life – to save for a big holiday, for example, or to fork out unexpectedly on a new boiler. But when does being cash-strapped stop being a short-term inconvenience and start to signal something more worrying? Our 10-point checklist should help you work out when it’s time to take things seriously:

1. You’ve no savings
Savings don’t just tide you over if your car needs fixing or the dog falls ill, but provide a financial cushion if you lose your job or can’t work. Money Helper says a good rule of thumb is to have enough to cover at least three months of essential outgoings to give you breathing space should the worst happen.

2. You’ve no idea how much money you have in the bank
You’re more likely to be in a financial muddle if you don’t know what’s coming in and going out of your account each month. For that reason, it may be an idea to regularly check your balance so you know when to curb your spending.

3. You use your credit card to pay for everyday expenses or bills
Being completely dependent on your credit card for daily expenses, or using a credit card for a cash advance (withdrawing cash) or to pay for utility bills could be classic signs you're not living within your means. Read our dedicated blog on how to use credit cards responsibly for advice on how to kick the habit and prevent a dangerous spiral of debt.

4. You find ways to justify your credit card spending
We’ve all been there – convincing ourselves that ‘just another £20’ won’t make much difference to our credit card bill in the grand scheme of things. However, it could prove a slippery slope if you’re struggling to pay your bills.

5. You avoid opening bills
Perhaps you subconsciously realise you can’t afford to pay them. Or maybe you’re just a little disorganised. Either way, try not to bury your head in the sand – it can often result in late payments and rack up associated fees.

6. You only make the minimum payments
If you don’t pay off your credit card in full each month you’re going to be hit by high interest. If you can’t afford to pay more than the minimum, you should think twice about using the card.

7. You go over the borrowing limits on your credit card or overdraft
Warning bells should ring if your usual lines or credit aren’t enough. Watch out for fees and penalties for exceeding your limit, which will only make the problem worse.

8. You feel panicky and stressed about your money situation
If it’s keeping you awake at night, it may need sorting. We appreciate this isn’t easy. Feeling anxious or depressed can make looking after your money harder. And worrying about cash can make your mental health worse.

9. You have to ask friends or family for loans
Perhaps they’re the only line of credit left open to you. If you’re doing this regularly it could be a sign you need to reconsider your finances.

10. Creditors are contacting you
If you’re getting calls or letters from people or organisations you owe money to, or your electricity, phone or other utilities have been cut off over missed payments, it’s time to do something about it. Avoiding the issue will likely make things worse.

What should I do if I’m in financial difficulty?

The word ‘budget’ is always bandied around on blogs and advice columns about financial wellness – and with good reason. Knowing how much you earn versus monthly outgoings, and coming up with a plan to cut back on the things you can’t afford is the best way to control your spending. It doesn’t have to feel a chore though. Read our blog on simple ways to make budgeting fun and/or use an app to streamline the process and keep closer tabs on your cash. Here are five of our favourite budgeting apps to get you started.

As part of your budget, think about ways you can cut everyday expenses, whether the weekly food shop (read how to save money on your groceries here) or monthly utility bills (find good tips to lower your electricity bill on our blog too). A few other ideas to stop over-spending could be to swap plastic for cash when you’re out and about, or to make your own entertainment at home rather than relying on expensive nights out.

Once you’ve identified money pits and found other ways to economise, you might want to start building a savings buffer to protect you financially in future. One way to get started is to open a savings account. Despite the relatively low interest rates, savings accounts can be worth using as they ring fence your funds so the money is available when you really need it. Work out what you can put away each month, and place it in your savings account as soon as your salary comes in. That way you’re less tempted to spend it than if it was sitting in your current account.

As with all financial products, make sure you compare savings accounts first to find the one best tailored to your individual needs. Bear in mind, however, that in many cases it makes more sense to pay off existing debts first before looking to save, as the interest you’ll avoid paying on them could be greater than the interest you’d receive by keeping the money in a savings account.

How can I avoid borrowing money to pay bills?

If you’re short of money and there’s a growing pile of bills on the table, it can be tempting to use a loan to payday or put them on credit card. It can be especially hard to resist since many of these products are marketed for their supposed ‘convenience’ – whether a quick online loan to get cash into your account within minutes, or bad credit loans aimed specifically at people who may have struggled financially in the past, or who still are.

This may sound obvious but going into your overdraft, taking out loans, and using your credit card are all forms of borrowing – and borrowing, especially with short-term products, usually comes at a price. Use them regularly for bills and the interest will soon add up, making life increasingly costly and potentially putting you in even more financial debt.

So what’s the alternative? Well, admitting you’re struggling to pay the bills is already a massive step forward. Ignoring them, or any other letters about money you might owe, may make the situation worse.

You might find it helpful to start a conversation with the companies concerned. They may be able to offer solutions, either by giving you a temporary payment holiday or by letting you pay off smaller amounts.

If it’s your overdraft that’s causing problems, same deal. Speak to your bank or building society and see what they can offer to help you pay it back. They might reduce or cancel the fees they’ve charged, or provide a grace period until you get back on your feet.

What can I do if money problems are making me feel low?

Having money and mental health problems can be “a marriage made in hell,” as one finance expert put it. The more anxious, panicky or depressed we feel about our money troubles, the harder it becomes to sort them out. At best, lack of motivation can see us miss payments or ditch our budgets. At worst, poor mental health can keep us in bed, off work and, consequently, at risk of losing our entire income. Below are just a few ways experts recommend coping with the situation:

1. Keep talking
Not just to creditors and your bank or building society, as we’ve already mentioned, but to friends, family and health professionals too. Try not to feel embarrassed or keep things bottled up – talking about your fears can not only relieve stress, it can also put things into perspective. You may even be surprised to discover other people have been through similar situations. Talking about money worries can also help you find solutions and ideas.

2. Stay active, eat healthily, prioritise sleep
The NHS recommends physical activity and keeping up social interactions as good ways to improve your mood and keep up your confidence. A healthy, balanced diet (as opposed to skipping meals or snacking) will also support your emotional health. You can find good ideas for eating well on a budget here. Finally, although it may feel impossible to turn off the internal money monologue some nights, try to get a decent sleep. Try going to bed at the same time each day, avoid screens beforehand and find ways to wind down and clear your head before hitting the pillow. Reading a book or relaxation exercises might help here.

3. Automate everything
When you’re feeling low, even basic financial admin can feel too much. It may make life easier in the long run to spend a few minutes automating as many bill payments and money transfers as possible. Setting up standing orders and direct debits mean you won’t have to remember deadlines. You could also set up automatic payments to a savings account, preferably for the day you get paid. This means the money you want for your emergency fund will be squirrelled away out of temptation without you lifting a finger.

Where can I find help if I am struggling financially?

There are plenty of organisations offering tailored support for people with money difficulties, and we’ve listed the main ones below. It’s always worth scouting out local services and financial help groups too, and following up on suggestions from friends and family members who might have been through the same problems and received help from other channels.

1. Help with finances
Money Helper (previously the Money Advice Service): Exists to make your money choices clearer with impartial guidance that’s backed by government. The website also lets you search for local debt advice services by postcode, which can be hugely beneficial.

Citizens Advice: Follows similar lines to Money Helper, offering confidential advice online, over the phone, and in person, for free.

Stepchange: A charity that gives free, flexible debt advice based on a comprehensive assessment of your situation. It then provides practical help and support for however long it’s needed.

National Debtline: A debt advice charity run by the Money Advice Trust. Its team of expert debt advisers will try to improve your situation and help you to take control of your debts.

PayPlan: Impartial, expert advice on a wide range of debt solutions.

2. Help with mental health
Mind: A charity providing advice and support to empower anyone experiencing a mental health problem.

Rethink: Working to improve the lives of people severely affected by mental illness through its network of local groups and services, expert information and campaigning.

NHS: A useful resource if you’re looking for information and support for your mental health.

Samaritans: For 24-hour support, call them on 116 123. If you need someone to talk to, they promise to listen, without judging or telling you what to do.

Mental Health & Money Advice: Clear, practical advice and support for people experiencing issues specifically with mental health and money.

3. Help with the cost of living
National Energy Action: If you or someone you know can’t afford to heat their home then this organisation might be able to help, both directly and via intermediaries.

Energy Bills Support Scheme: A government initiative to help people deal with rising bills.

Citizens Advice: Advice on using food banks, including how to get a referral.

Final thoughts

It may take time and it might not be easy, but recognising there’s a problem and reaching out for help can get the ball rolling and your finances back on track. Don’t be afraid to ask your bank or building society for advice, or any of the other organisations we’ve listed in this post.

Remember, you’re not alone. This is a difficult period for so many people. Support is out there and together you should be able to find a solution to make your current situation less of a struggle.