Taking a forward-thinking, calm and collected approach to your finances has many benefits. But sometimes it's easier said than done.
Canadians carry a lot of consumer debt and they’re stressed out about it. According to recent Statistics Canada data, households owe $179 for every $100 of disposable income.1 It's no surprise that an online poll by Angus Reid found that nearly a third of Canadians regularly feel very stressed about money.2
Different things can lead to financial stress. Factors include separation and divorce, the loss of a loved one, caring for a loved one, going through abuse, going into debt and even being afraid of losing your job.
Financial stress can affect anyone, from the student racking up debt to those worried about not having enough money saved up for retirement.
How can you reduce the impact of financial stress on your wellbeing? When the worry begins to affect your mental health and general wellbeing, it can be time to get help.
The connection between money and mental health
Medical experts suggest that financial health and mental health are closely linked. According to clinical neuropsychologist Dr. Moira Somers, worrying about money can have a harmful effect. “Money is inextricably interwoven into all aspects of our lives, and managing it effectively is a modern survival skill, so when things are not going well for us financially, we tend to use up a great deal of our brainpower finding solutions or ways out of our dilemma,” she told the Financial Planning Standards Council.
“If the stress is prolonged, it can be quite exhausting, and can even cause temporary reductions in IQ and problem-solving abilities.”3
For many, even thinking about money is stressful. However, avoiding the topic only keeps the stress in the back of your mind and it might even affect your health.
How to deal with financial stress
One way to try to feel a sense of control is by taking the time to understand and track the money you’re currently making and what you’re spending it on. Doing this can help you create a realistic budget and stick to it.
By following a budget and paying your most important bills before anything else, you might find it easier to control your spending and gradually have more money available. And the more cash you put towards paying down your debts, the faster you will find yourself on track toward financial wellbeing.
Resources to help with money management
Some employers offer an Employee Assistance Program. If your employer offers this program, you can use the services of a financial counselor who can help you prepare a budget and offer debt management advice. All services provided by an EAP are confidential.
Contact your employer's EAP provider for more information. If you can’t work due to illness or injury, you may want to ask someone you trust for help looking into resources for financial assistance.
The Government of Canada also offers resources and strategies online about paying back debtOpens a new website in a new window. They share some important information, including places to get help if you’re having trouble making loan repayments. Some government-sponsored benefits include Employment Insurance (EI), Canada Pension Plan (CPP), housing benefits, disability benefits, and the Provincial Disability Support Program.
Remember that regardless of the state of your finances, you aren’t alone and there are options and resources available to help you.
Overall, taking care of your mental health is important for whatever stage of life you’re in.
1 "Statistics Canada says household debt grew faster than income in fourth-quarter", 2019. https://www.cbc.ca/news/business/household-debt-income-1.5056159Opens a new website in a new window
2 “Almost a third of Canadians 'very stressed about money,' report finds”, 2018. https://www.ctvnews.ca/canada/almost-a-third-of-canadians-very-stressed-about-money-report-finds-1.4016503Opens a new website in a new window
3 "Money and Mental Health: Canadians More Embarrassed About Their Financial Situation Than Four Years Ago", 2018. https://www.newswire.ca/news-releases/money-and-mental-health-canadians-more-embarrassed-about-their-financial-situation-than-four-years-ago-681930421.htmlOpens a new website in a new window
Talk to an expert
Not feeling confident in your finances? You can talk to one of our financial security advisors who will work with you to craft a financial plan tailored to your needs.