Avoiding financial crisis: why seeking help early can make all the difference

Financial counsellor Kevin advises not to leave it too late to reach out for Moneycare support.

‘Seek help early when financial troubles arise’ is more than just good advice — it can be a lifeline, according to Queensland-based Salvation Army Moneycare financial counsellor Kevin van Kuijk. This Moneycare Week (19–25 January), Kevin explains that in times of financial stress, waiting until legal action or eviction is imminent only limits your options. 

“Many banks, utility companies, and other organisations may be willing to discuss options if you are struggling with repayments, provided there is open, honest, and early communication,” says Kevin. He encourages anyone feeling financial pressure to reach out to creditors and banks, rather than avoid communication around missed payments. 

A financial counsellor can also be a crucial support. 

“It’s never too early to come and see us at Moneycare. Our service is free, confidential, and non-judgmental. The earlier people come to see us, the more options we have available to explore and proposals to put forward to their creditors,” he explains.  

Starting the new year in a state of financial stress? The Moneycare team is here for you. To contact a financial counsellor, call us on 1800 722 363 or start an online chat today.

Lee* contacted Kevin at Moneycare, feeling highly distressed and on the verge of losing her home. Her husband had lost his job due to a struggle with alcohol addiction, and Lee had been so overwhelmed by stress and shame that she couldn’t bring herself to contact the bank. After several months of missed mortgage payments and no communication, the bank had started legal action. 

“Lee was convinced she was going to lose her home,” Kevin says. “At the same time, she really wanted to keep life as stable as possible for her children.” 

Together, Lee and Kevin contacted the bank, and, despite the delayed communication, the bank offered her a chance — with the expectation that she follows guidelines and strictly meets her obligations.  

With Kevin’s support, Lee worked on a financial plan. As a stay-at-home mum with young twins, whose husband had previously travelled for work, Lee also successfully applied for a traineeship to re-enter the workforce. 

With some support from her wider family, and some other changes, Lee managed to pay back some of the missed payments, which led the bank to agree to add the remaining overdue amount back into her loan. 

For Lee, the relief was enormous. Looking back, she says: “It is such a load off my shoulders. I’m so grateful!” 

Dangers of ‘easy’ credit schemes 

Kevin explains that many of the community members he supports accumulate debt due to rising living costs or unexpected expenses. “You have situations like a car breaking down or the fridge needing repairs, and the bills can quickly pile up,” he says.  

“We also often work with people facing family or domestic violence, or those who have recently left such situations, which makes everything even more difficult.” 

As skyrocketing rent, interest rates, and living expenses impact many, credit products like ‘buy now, pay later’ schemes can seem like an ideal short-term solution. However, Kevin says they often worsen financial situations. 

“People take on multiple small debts, often without realising how quickly they can spiral out of control,” he says. “Credit products like ‘buy now, pay later’ look deceptively appealing because they spread out payments. But if you miss a payment, it suddenly becomes very expensive, and you can find yourself caught in a debt trap.” 

When explaining these schemes during financial counselling, Kevin says many people are surprised by the hidden costs and by the fact that people tend to spend more when using credit rather than saving up and paying in cash. 

Building financial strength and understanding 

Kevin explains that financial education, understanding, and a good basic money plan are key to managing money more effectively and helping avoid future debt traps. 

“Sometimes, small tweaks in a budget can have a big impact over time,” Kevin says. Planning for the future, even in small ways, can also make a big difference. 

“We all know, for example, when Christmas is coming, but every year it still surprises many people,” he says. “If you start saving early, by the time December arrives, you’ll have a buffer for gifts and other costs.” 

Whether it’s helping to prevent eviction or foreclosure, as it was with Lee, or helping someone manage smaller debts that still cause great stress, Kevin says, “When people come in, they usually are heavy laden, burdened with issues that are causing stress — the main ones being cost of living, personal finances and housing expenses. 

“To get them in and have a conversation, hear their stories and help them explore options — and then see the stress start dropping off when they begin making progress — that’s one of the most fulfilling [aspects of being] a financial counsellor.” 

You can experience less stress and more financial confidence. Have an online chat with us today. All it takes is 10 minutes to start feeling good.  

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*Name and some details changed for privacy. (Parts of this article courtesy of Salvos Magazine.)