Financial difficulties

Inadequate livelihood and other financial difficulties have a profound effect on life. The number of people suffering from financial difficulties grows in times of recession, which is why financial difficulties are again something more people are experiencing. Although financial difficulties are common and current, financial concerns may still cause a feeling of shame in a person. Shame often makes it difficult to seek help. Many people don't even know all the possible sources for help in financial difficulties.

In times of financial trouble, it is important not to become paralysed. The best option is to actively find out what can be done. It is important to stop running into debt in time. Even if some debt has already incurred, the situation is not hopeless. A financial crisis is just like any other crisis in life: you have to live it through, but it is possible to overcome it both mentally and financially. The following tips may help people in financial difficulties:

Check your social welfare benefits

People often don't know what benefits they are entitled to. Many people that are entitled to income support from the municipal social welfare service, for example, don't apply for it. In addition to income support, municipalities also provide preventative support based on grounds they determine themselves. If the income support covers nutrition and medical expenses, for example, preventative support may be used for paying the children's hobbies. Preventative income support aims to support family’s ability to cope and prevent social exclusion.

Some municipalities also arrange social loans. With social loans, previous debt can be combined into one, larger loan. They can also be used for necessary purchases, such as domestic appliances. Also benefits offered by KELA, such as housing allowance, child maintenance allowance, single parent increase for child benefit, disability allowance or special care allowance may sometimes not be claimed by people entitled to them. You should definitely find out about what benefits you or your family are entitled to.

Municipal finance and debt counselling

You can seek help from a finance and debt counsellor before there are problems. It is sufficient that you feel that you need help or advice in financial matters. The service is free for the customer. For contact information of the finance and debt counselling of your municipality, see the Consumer agency's web site.

Services of the Guarantee Foundation

The Guarantee Foundation guarantees restructuring loans for private individuals in excessive debt and offers free telephone counselling for people with debt problems.

Services offered by organisations and parishes

Local parishes usually have social work funds to distribute in addition to mental health support. Also some organisations provide food assistance. A social welfare officer of the church probably knows the organisations supplying food assistance in the municipality.

What you should not do if you are faced with financial difficulties

  • Desperate solutions such as trying to transfer assets out of reach of debtors. This prevents admittance to debt restructuring, for example.
  • Forget that it's finally just about money.
  • Losing your health or relationships over financial difficulties is not worth it.
  • Become paralysed, not opening incoming invoices or not contacting creditors or financial and debt counselling.

Telling the children

It is the job of adults to make sure that children get to be children. Children should be burdened with adult troubles as little as possible. Children may also not understand that they are not able to influence many of the things in the world of adults, which is why they should at least not be burdened with unrealised threats, such as the possibility of becoming unemployed.

If the threats have, however, already become realised, children should be told about them realistically but without unnecessary details. If necessary, talking with a friend, relative, colleague or professional advisor is a better option. Financial difficulties may affect a child's life in many ways, which is why they should know what is going on. This way they may understand, for example, why they can't have the same hobby as a friend.

You should try not to pull a child in into your own troubles. As normal a childhood as possible should be maintained. This also means taking care of yourself in such a way that the child does not have to be afraid for their parent. You can also show your child that financial difficulties basically only involve material things, not love. It is important for a child to understand that relationships between people are much more important than the financial situation and that even when a parent is irritable and worried because of financial problems, they still love the child.

Getting over financial difficulties

It would be good to be able to talk to someone about financial difficulties. Talking about the situation helps understand it better and gets things into perspective. Bankruptcy of a company, for example, may feel like the end of the world at first, but it is not that. Recovery from a financial crisis is possible just like any other crisis in life. Losing your health over financial troubles is not worth it.

It is usually very difficult to adjust to the lower standard of living in the beginning. Our society strongly encourages spending money and even taking on debt. The debt-equity ratio of Finns has increased steeply in recent years. More and more people are not able to balance their income and spending.

Excessive debt and financial difficulties lead to a forced decrease in one's standard of living. Lowering the standard of living is, however, a lesser evil than increased stress caused by financial difficulties. People are usually quite adaptable. A situation that first feels impossible, such as moving to a smaller house or a rental flat, usually starts to feel normal or even good at some point.

It is important to try and put things into some kind of context and try to live as happily as possible. Losing the house and the car and ending up in excessive debt are, however, usually not as important as your health.

Those who have become bankrupt know that not all businesses make it. The possibility of bankruptcy is a part of being an entrepreneur. Going bankrupt is not a crime. Nevertheless, it often causes powerful feelings of shame in a person. Processing these feelings by talking about them, for example, may be very important in recovering from the bankruptcy. Bad feelings that are not processed may later lead to depression, for example.

In the worst case, shame may be so strong that it prevents a person from seeking help. Feelings of insignificance, guilt, inadequacy, inferiority and incompetence may paralyse a person completely. Besides shame over what has happened, a person may be ashamed of themselves. Powerful shame may even lead to panic. To talk about feelings caused by bankruptcy or financial trouble, you can call the crisis hotline, tel. 01019 5202.

Other useful links:

Financial and debt counselling of the City of Espoo. The site is also useful information for those not living in Espoo, giving information on debt restructuring, negotiations with creditors and recovery proceedings, amongst other things. There are also links to several non-profit organisations that may be useful in times of financial difficulties.
Financial and debt advice of the Consumer agency
Guarantee Foundation
Kaski-ryhmä. Peer support for those in financial difficulties. (In Finnish)
Advise services of the Federation of Finnish Enterprises (members only)