Financial stress is a growing concern among Canadians in today’s economic climate. Whether it’s mounting debt, rising living costs, or uncertainty about the future, financial stress can seriously impact mental health, productivity, and overall well-being. With inflation remaining high and wages often lagging, it’s not surprising that money is one of the top stressors for Canadians. What may surprise some: You can do something about it. First, though, let’s get a handle on financial stress and the often-hidden health impacts.
What Is Financial Stress?
Financial stress refers to the emotional strain resulting from money-related concerns. It can stem from various factors, including an inability to meet daily expenses, overwhelming debt, unexpected emergencies, or fears about retirement and long-term financial security. Financial stress can lead to anxiety, depression, insomnia, strained relationships, and poor physical health.
According to the Financial Consumer Agency of Canada (FCAC), financial well-being is about feeling secure and in control of your finances, not simply about income or wealth. Someone with a modest income who lives within their means and plans for the future may experience higher financial well-being than someone earning more but living beyond their financial capacity.
Why Are So Many Canadians Struggling Financially?
Several factors contribute to financial stress among Canadians:
- Rising Costs of Living: Inflation continues to drive up the prices of groceries, housing, and other necessities.
- Household Debt: Many Canadians carry significant debt, including student loans, credit card debt, and mortgages.
- Stagnant Wages: For many workers, wages have not kept pace with the rising costs.
- Lack of Emergency Savings: A large portion of the population lives paycheque to paycheque, making it difficult to cope with unexpected expenses.
Additionally, life events such as job loss, illness, or a family emergency can quickly destabilize financial security.
Data collected between August 2020 and January 2025 paints a concerning picture of financial vulnerability across Canadian households:
- Managing money and debt: 39% of Canadian households with debt reported their debt has increased recently; 50% have accessed their savings to cope with economic pressures; and only 52% report using a budget to manage finances. While 69% of households spend less than or equal to their monthly income, this is down from 81% in 2019. Among those, 59% said their debt increased by more than $5,000 in the past 12 months. Furthermore, just 53% have an emergency fund that could cover three months of expenses, down from 64% in 2019.
- Financial vulnerability: 56% of households sometimes struggle with their financial commitments, 35% borrow money for daily expenses, and 32% of Canadians report experiencing high levels of anxiety, stress, or worry related to finances.
- Financial knowledge, credit records, and fraud: Only 44% of Canadians describe themselves as financially knowledgeable. Meanwhile, 68% believe their current credit record is good or very good. Alarmingly, 12% have been victims of financial fraud or scams within the last two years.
- Money worries: Nearly half (44%) worry their money won’t last, 37% feel they are just getting by, and 33% say they are short of money at the end of the month. Additionally, 35% feel finances control their lives, and 29% believe they will never have what they want financially.
These numbers highlight the widespread nature of financial stress, cutting across income levels and age groups.
Money Worries and Health: The Hidden Costs
Financial, mental, and physical wellness are closely interconnected pillars of overall health. For many Canadians, money worries are the greatest source of stress, even more than work, personal health, or relationships. Research shows:
- Nearly half of Canadians have lost sleep due to financial worries.
- Almost one in three Canadians are short on money at the end of the month.
- Financial stress doubles the likelihood of reporting poor overall health.
- It quadruples the chance of suffering from sleep problems, headaches, and other illnesses.
- It increases strain on personal relationships.
- Financial stress contributes to serious health issues like heart disease, high blood pressure, and mental health disorders such as anxiety and depression.
Financial Stress at Work
The effects of financial stress ripple beyond personal life into the workplace. More than half of working Canadians admit their job performance has suffered due to stress related to personal finances. This underscores the importance of addressing financial wellness not just at home but also within workplace environments.
Traits of Financial Well-Being
According to the U.S. Consumer Financial Protection Bureau, financial well-being includes four key traits:
- Control over daily finances – Paying bills on time and managing monthly expenses.
- Capacity to absorb a financial shock – Having savings, insurance, and a support system.
- Progress toward financial goals – Whether it’s paying off debt, saving for a home, or investing for retirement.
- Freedom to make financial choices – Including the ability to occasionally splurge or support loved ones.
Financial well-being is influenced not only by external factors like income or inflation but also by individual behaviours and traits such as perseverance, future planning, executive functioning, and financial self-efficacy.
Workplace Support: The Role of Financial Wellness Programs
Given the toll financial stress takes on productivity, absenteeism, and mental health, Canadian employers can play a vital role in supporting their workers’ financial wellness. Workplace financial wellness programs, when thoughtfully designed, can help employees gain confidence in managing their finances and reducing stress.
Features to look for in effective financial wellness programs include:
- Financial education and literacy training
- Access to planning tools and financial advisors
- Emergency hardship funds or low-interest loan programs
- Risk assessments to help employees understand their financial position
- Employee Assistance Programs (EAPs) that offer financial and legal support
What Can Individuals Do?
While many factors are beyond any one person’s control, individuals can take steps to improve their financial well-being:
- Create a budget and track spending
- Set realistic financial goals and review them regularly
- Build an emergency fund, even if slowly
- Seek out free or low-cost financial education resources
- Talk openly about money with trusted friends or advisors
It’s important to understand that financial stress is not a personal failing, it often results from structural and societal factors. That said, cultivating financial knowledge, planning skills, and self-confidence can help individuals move toward greater financial security.
You don’t have to face financial stress alone
Financial stress is a complex, multifaceted issue affecting millions of Canadians. But it’s also something we can address here and now.
If you’re experiencing financial stress, remember, you don’t have to face it alone. Life happens, and sometimes even the best plans can fall apart. At Qxplore, your Employee and Family Assistance Program (EFAP) includes confidential access to Sandra Valks, our in-house financial advisor. With decades of experience, Sandra can help you review your budget, tackle debt, answer your financial questions, and work through money worries before they start affecting your work, home, or personal life. Make an appointment with Sandra today and take the first step toward financial peace of mind.
References:
Bonner, P. A. & International Foundation of Employee Benefit Plans. (2016). Financial Wellness and Education in the Workplace: Strategies and best practices. In International Foundation of Employee Benefit Plans. https://www.ifebp.org/docs/default-source/pdf/resources—news/financial-wellness-and-education-in-the-workplace58496546dcad417497464954376fdb5d.pdf
Financial Consumer Agency of Canada. (2024, May 29). Canadians’ Financial Well-being: Summary of FCAC survey findings. Canada.ca. https://www.canada.ca/en/financial-consumer-agency/programs/research/summary-covid-19-surveys.html
Financial Consumer Agency of Canada. (2025, March 28). Managing your money in challenging times. Canada.ca. https://www.canada.ca/en/financial-consumer-agency/services/covid-19-managing-financial-health.html
Robinson, L., & Smith, M., MA. (2024, July 31). Coping with Financial Stress – HelpGuide.org. HelpGuide.org. https://www.helpguide.org/mental-health/stress/coping-with-financial-stress
The Jed Foundation. (2025, April 16). How to Deal with Financial Stress | JED. https://jedfoundation.org/resource/how-to-deal-with-financial-stress/