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6 million Aussies turn to family and friends for financial support - featured image
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6 million Aussies turn to family and friends for financial support

A Finder survey of 1,085 revealed 1 in 3 (30%) Australians have leaned on family and friends for financial support in the past 12 months.

The top expenses Australians sought financial help for are:

  • groceries (16%),
  • rent (9%), and
  • petrol (7%).

Medical costs (5%) and school fees (5%) were next on the list.

Have you had to ask a friend or family member for financial help in the past 12 months?
Expense Percentage who asked for help How much they asked for
Yes, for groceries 16% $148
Yes, for rent 9% $399
Yes, for petrol 7% $505
Yes, for medical costs (eg. doctors visit, medicine) 5% $997
Yes, for school fees 5% $2,897
Yes, for travel costs 4% $986
Yes, to pay off personal debt (eg. credit card, BNPL, personal loan) 4% $1,047
Yes, for my mortgage repayment 4% $3,089
Yes, to pay a fine (eg. road fine, parking fine) 2% N/A*
Other (please specify) 1% N/A*
No, I haven’t had to ask anyone for financial help 70% N/A

Of those who asked for financial help, 2 in 5 (44%) called on their parents, while just over 1 in 3 (37%) leaned on friends. Almost 1 in 10 (8%) received financial support from their kids.

Gen Z was in need of the most help from friends and family (59%), compared to gen X (19%) and baby boomers (5%).

Who did you ask?
Parents 43%
Friends 37%
Siblings 23%
Grandparents 12%
Extended family 9%
Kids 8%

The highest amount of money requested was for mortgage payments, with those needing aid (4%) seeking an average of $3,089.

This was followed closely by those seeking money to cover school fees (5%) who asked for an average of $2,897.

Tips for getting out of financial hardship

The first step towards improving your financial situation is, to be honest with yourself about the truth of your finances.

Avoid ignoring reality and take a clear look at your expenses versus your income.

Creating a budget that includes all of your income and expenses, such as bills, groceries, and discretionary spending, is crucial.

You can use free tools to help you categorize your spending and bills, which can help you identify areas where you can save money.

Additionally, shopping around and paying less for expenses like car insurance and phone plans can help you get back on the financial front foot.

If you're struggling financially, it's important to understand where your money is going so that borrowing from friends and family doesn't become a band-aid solution.

Instead, it should be considered in the context of your overall financial picture.

If you need additional help, don't hesitate to contact the national debt helpline at 1800 007 007.

How to protect yourself when lending someone money

Ask to see their credit file

Everyone is entitled to order a free copy of their credit files once a year.

Explain that the loan is a risk for you and that having a better understanding of your friend’s credit position will reduce issues down the line.

Lend the money in cash

Asking for money is one thing, but being asked to open a loan in your name or to go guarantor on a loan is very different.

Never put yourself in a position where someone could damage your credit score.

If you are going guarantor, make sure you understand the risks and have sought legal advice beforehand.

Home+loan+borrowers+should+budget+for+p&i+repayment

Create a written agreement and include worst-case scenarios

You should create a loan agreement that outlines the amount of money being lent and when your friend should repay you.

You should also include what happens if they can’t repay.

Think about the possibility of them losing their job or having unexpected expenses crop up that renders them unable to repay the loan.

Write these into the agreement so you’re both clear on the protocol.

Act like a bank

Charge interest on the loan and set in place fees if your friend makes a late payment.

It’s important to set a reasonable interest rate and terms, but having these in place will make the agreement formal and show you’re serious about having the loan repaid.

About Sarah Megginson is senior editor of home loans for Finder. She was previously managing editor of Australian Broker magazine, Your Investment Property magazine, and online home loan comparison site, Your Mortgage. Sarah has worked as a finance and property journalist for more than 15 years.
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