One in five hitting up friends and relatives to help pay as cost of living bites
It is often said that in times of adversity, we find out who our real friends are. For many Australians, recent economic challenges have meant turning to close friends and family for help.
A recent report, as highlighted by the headline "One in five hit up friends or family as times tighten: survey" from the Australian Financial Review (AFR), delves into the depths of this dynamic. The findings are both telling and somewhat concerning.
This article, based on a survey conducted by the Australian National University (ANU), offers a glimpse into how individuals are coping with economic challenges. One of the most significant takeaways is that individuals are more inclined to ask for financial help from friends and family than to reach out to their service providers.
According to the AFR article: "the ANU report shows people seeking options have traditionally been more likely to ask for help paying bills from friends and relatives more than contacting their providers." This sentiment is not new; throughout history, many cultures have looked inwards to their community, clan, or tribe during tough times. However, the sheer scale of this reliance in the modern age, especially in a developed nation like Australia, is noteworthy.
Why are people turning to family and friends over Providers?
Why do individuals feel more comfortable seeking help from personal connections than from institutions they are directly linked to? One potential reason could be the emotional safety net that friends and family provide. Being in financial distress is not merely about lacking funds; it carries with it a significant emotional burden.
And indeed, are friends and family likely to help when asked? Data from HelpPay suggests a comforting reality. Friends and relatives view being asked for assistance as an honour, and they experience 'friendly concern' for the individual asking. This underscores the deep bonds and the layers of trust existing within personal relationships. In further testament to this, research from finder.com.au revealed that 51% of parents are already covering at least one household bill for their adult children.
Fear of judgment, embarrassment, and the potential long-term impacts on credit scores or financial standing might deter many from reaching out to institutions. On the other hand, seeking help from loved ones might be seen as a softer landing, an environment where the individual feels understood and not judged.
Trust plays a pivotal role.
The same research from HelpPay points out that friends and relatives are more likely to give assistance repeatedly if they have confidence in the method of giving. They want assurance that the help they extend will undoubtedly reach its intended recipient. This points to the intersection of trust, technology, and transparency in financial aid scenarios.
The article further highlights some data that might be indicative of the current state of the economy: "Out of those surveyed, nearly 20% admitted to borrowing money from friends or family in the last year." That's one in every five individuals leaning on personal connections for financial aid. This statistic not only emphasizes the gravity of the situation but also hints at the possible ripple effects on the broader social fabric.
Opportunities for businesses.
It's worth pondering the potential consequences. With such a substantial number seeking help from friends and family, what might be the long-term implications for businesses and what opportunities come from customers who have no fear asking family and friends for help?
Another question raised by this report is the readiness of service providers in addressing their customers' needs. Are institutions doing enough to make themselves approachable in these challenging times? Do or should customers have to pick up the phone and tell their story and personal situations for some relief? Or, is there a gap in the services they offer and the ways they interact with those they serve? This information from ANU underscores a potentially significant service gap that institutions may need to address, ensuring they remain not only relevant but also supportive of their client base.
As quoted from the AFR article: "Financial counselling services have seen an uptick in inquiries, suggesting that while people might first turn to friends and family, they are also seeking professional help." This indicates that while personal connections are the first port of call, there's a recognition of the value in seeking structured, professional financial guidance. Providers and institutions might do well to capitalize on this trend, offering more holistic support that addresses both the financial and emotional challenges faced by individuals.
In conclusion, the economic landscape is always in flux, with individuals constantly adapting to its vicissitudes. The recent report from ANU, highlighted by AFR, is a reminder of the crucial role personal relationships play in our financial lives. It's a call for greater empathy, understanding, and support both within our personal circles and from the institutions we rely on. In tough times, the true strength of a community, be it familial, social, or institutional, is tested. How we respond will define the resilience and character of our society.
Helppay is a 100% Australian owned and operated company that partners with service organisations in complex and highly regulated industries to improve cash flow, reduce customer debt and enhance companies social standing by removing debt from the communities they serve..
HelpPay's B2C app makes getting and giving help easy and trusted and Helppay's B2B platform and API enables businesses to offer a debt prevention service and track performance in conjunction with existing customer soltutions and billing programs.