6 Ways to Help When Your Parents Are Drowning in Debt

If you want to help your parents get out of debt but are unsure where to begin, here’s how to help.

Elderly man talking with adult son
Updated May 13, 2024
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It’s not easy to talk about money as it is, and discussing money with your parents may sound like an impossible feat. But what if it isn’t your finances that are the focus of the conversation? What if it’s your parent’s finances? And what if your parent’s debt is the issue?

Helping your parents manage their debt can be emotionally taxing, for you and them — especially if they’re drowning in debt. They may feel embarrassed about their financial situation and reluctant to accept help, and you may be unsure of the best way to approach the topic or help them.

As difficult as it may be to talk to your parents about their debt, avoiding it altogether won’t do any good. Here’s how to help your parents with their debt, while keeping the conversation productive and positive.

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How to help your parents with their debt

  1. Talk with your siblings
  2. If you have siblings and they have a good relationship with your parents, it’s important to get them involved. Helping your parents should be a team effort, and everyone should be on the same page. Your siblings may also have differing opinions as to how to pay off debt for your parents. All this should be discussed beforehand so that when you address things with your parents, you and your siblings are on the same page.

    Collaborating with your siblings can also provide insight that could better help the situation. They may have information you don’t or suggestions for how your parents should go about paying off their debt. It’s important that you decide together how to best approach the subject with your parents.

  3. Talk with your parents
  4. When you’re ready to have the conversation with your parents, be empathetic and honest. Express your concern and tell them you want to help. Remember that it’s not always easy to discuss money issues, so they may be reticent at first. In order for the conversation to be productive, your parents have to be open to receiving help. If they aren’t, you at least planted the seed that you’re concerned and you’re there for them.

    If they’re open to receiving help, reassure your parents they’re not alone and you want to help them get to a better place financially. You’ll then need to set aside time to take a thorough look at their financial situation together.

  5. Assess their financial situation
  6. When you sit down to go over your parents’ finances, make sure to explore everything. Only when you have a clear picture of what’s going on can you put an actionable plan into motion.

    Determine what your parents owe, and to which creditors. This includes credit cards, mortgages, medical bills, and other loans. Not all debts are created equal, so sorting them out can help as you put a plan in place to begin paying them off. For example, paying off their credit card debt may be more pressing than paying off their mortgage. Once you know exactly what is owed and to whom, you can create a repayment plan.

  7. Make a plan together
  8. Once all your parents’ debts are evaluated and their priority debts are identified, make a plan for paying them off. If their current income isn’t enough to repay their debt while covering necessary expenses like groceries, gas, electricity, etc., it might be necessary for your parents to find ways to earn more money. For any expense that isn’t vital, consider putting it on hold for now. Cutting down on frivolous spending can free up a good amount of money which can be put towards repaying debt.

    If your parents are financially able to tackle their debt on their own, a repayment strategy like the debt avalanche or the debt snowball method is worth considering. The debt snowball method might be a good idea if your parents need the psychological boost of making headway sooner rather than later, as this repayment method focuses on paying the smallest debts first. The debt avalanche method, however, focuses on repaying the costlier debts first — think high balance, high interest rate debts — which will save your parents more money in the long run. Either way, both are worth exploring.

    Create a budget and a repayment plan for all their debt. If your parents aren’t able to repay what they owe on their own, discuss options for outside help. Family support may be the most affordable option, but it might also cause friction in your family, so be careful. Other options can include debt consolidation and debt settlement companies. If you go this route, do your due diligence and make sure the company you plan to work with is legitimate and reputable.

  9. Keep your spouse in the loop
  10. If you’re thinking about giving your parents money to help them pay off debt, it’s important to talk with your spouse first. Your finances concern your spouse as well, so they should know exactly what’s going on.

    Most importantly, you both should agree on any decision to help your parents financially. If you both agree to help, make sure your financial situation allows for it. You don’t want to overextend yourself and dig yourself into a hole financially either.

  11. Help them stick to the plan
  12. Creating a budget and a repayment plan is one thing, but sticking to it is another. That’s because it may require you to change your lifestyle and habits, which takes time and, more importantly, lots of discipline. Reassure your parents that while this change in lifestyle may be challenging at first, the ultimate goal is to better their financial situation.

    Here are some tips for helping your parents stick to their debt repayment plan:

    • Make sure the debt payoff plan is realistic: It’s hard to stick to something if it’s unrealistic, to begin with. If you’ve overestimated the amount your parents can pay, it may make sense to adjust your plan or throw in the towel and consider hiring a company that focuses on debt repayment.
    • Put the plan in writing: Instead of relying on memory to stay focused, put the debt repayment plan in writing. Not only can this help your parents stay committed but it will also give them something concrete to refer to along the way.
    • Keep track of their progress: As your parents continue to make their payments, their balances will go down. Every so often, compare their current balance to their balance when they started. Regardless of how far they’ve come, any progress is worth acknowledging.
    • Pay more towards debt whenever possible: If there’s extra money leftover at the end of the month, they should consider throwing it at debt. Take another look at their expenses a month or so after putting a plan in place, as you may be able to spot expenses that could be cut out to free up even more money.
    • Don’t be derailed by the occasional setback: If everything doesn’t go according to plan, remind your parents not to give up. It can be difficult to adjust to a new lifestyle. Figure out where the plan went wrong and try again.
    • Stick to the budget: Sticking to a budget is vital. When you don’t keep track of your spending, it’s easy for it to spiral out of control. The budget can be tweaked along the way, but it shouldn’t be disregarded entirely.
    • Don’t add to the debt: As your parents repay their debt, it’s important that they don’t add to it. If this means ditching all credit cards and using cash until proper money management skills are in place, it might be worth exploring.
    • Take short, planned breaks if you need to: Debt repayment can be taxing. If your parents need to take some time for themselves, it’s better for them to take that time and stay motivated rather than get derailed and give up entirely.
    • Keep the end in mind: Depending on how much debt is owed, the time it takes to repay it can feel like an eternity. During this time, it’s easy to lose focus and forget what you’re working towards. If your parents keep the end goal in mind, it makes it easier to stay motivated.

What to avoid if you’re helping your parents with their debt

Money is naturally a personal subject, and if your parents are struggling financially, it’s likely a sensitive subject for them. Approach the topic with empathy and avoid getting angry or upset. Talking about financial troubles isn’t easy, but avoiding the conversation entirely won’t help either.

Your first instinct may be to offer to give your parents money, but this should be avoided if you don’t understand your own finances. If you do choose to help financially, make sure you’re in a position to do so without jeopardizing your own financial situation. You don’t want to overextend yourself to help your parents.

You also want to make sure that your spouse is comfortable with helping your parents financially, as this would involve them just as much as it involves you. Avoid offering money to your parents until you and your spouse can agree on a game plan.

The bottom line on helping your parents in debt

It’s not always easy discussing money, and climbing out of debt is no easy feat either. But if the situation goes unacknowledged, it’s likely never going to get better. Approaching the subject doesn’t have to cause a problem. Be empathetic to your parent’s situation, and they may prove to be more receptive about receiving help to get out of debt than you thought. If that help involves your money, make sure it doesn’t worsen your financial situation in the process.

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Author Details

Matt Miczulski

Matt Miczulski is a personal finance writer specializing in financial news, budget travel, banking, and debt. His interest in personal finance took off after eliminating $30,000 in debt in just over a year, and his goal is to help others learn how to get ahead with better money management strategies. A lover of history, Matt hopes to use his passion for storytelling to shine a new light on how people think about money. His work has also been featured on MoneyDoneRight and Recruiter.com.