It’s an unfortunate truth that financial stress is something that many Canadians deal with on a daily basis. But just because it’s common doesn’t mean it isn’t serious.
Luckily, there are ways to cope with financial stress – there are even ways to eliminate it completely, if you’re dedicated and have a strong support system. By first looking at your own personal finances and identifying what financial stress looks like, what the root cause is, and what resources are available, you can prepare yourself to find a solution that’ll work for you and your family.
To help you on this journey towards mental and financial health, we’ve created this guide to dealing with financial stress. We’ve looked at the aspects of this issue from several sides and come up with a list of tips that can get you started on the road to recovery.
- What is financial stress?
- How to manage stress
- Financial stress tools and resources
- Confide in others about your financial stress
- FAQ
What is financial stress? What does it look like?
Although financial stress can look different for every person experiencing it, it can generally be defined as mental and/or physical tension or anxiety brought on by details related to your personal finances.
According to the Financial Consumer Agency of Canada, money worries are the main source of stress in most people’s lives, far more than work stress, personal health issues, or even stress from relationships. Unfortunately, nearly half of Canadians have lost sleep due to financial stress.
FP Canada publishes its Financial Stress Index each year and the 2022 survey noted some concerning statistics:
- 38% of Canadians reported that money is the top subject on their minds.
- 39% of Canadians report feeling a lack of confidence in their financial future (as compared to the previous year).
- 35% admitted that their financial stress had led to several types of mental health issues.
All of this to say, if you’re experiencing significant financial stress in your life, you’re not alone.
Some signs of financial stress
It’s true that people experiencing financial stress can exhibit a variety of signs and symptoms, and it’s also true that these can vary from person to person.
However, here are some signs to look out for that can signal someone is experiencing this type of mental strain.
- arguing about money with your loved ones,
- withdrawing/lack of socialization,
- excessive worrying or feelings of anxiety,
- problems sleeping,
- feelings of fatigue and generally low energy levels,
- stomachaches and/or headaches,
- strain in your personal relationships, and
- feelings of hopelessness and/or depression.
Whatever your own signs or symptoms might be, we are here to offer some tips on how you might find relief and improve your health.
How to manage stress – especially financial stress
For many, the antidote to anxiety is action.
Here are some actionable steps that can put you on the path toward overcoming financial stress.
1. Identify the biggest area(s) of financial stress
Naturally, the first step is to try and identify the areas that are causing you the most stress. This can be harder than it sounds, but if you’re able to pinpoint where the issues stem from, you’ll be more able to properly deal with them.
Here are some of the most common areas that cause Canadians financial stress:
- managing household expenses,
- trying to pay down high levels of debt,
- living paycheque to paycheque,
- struggling to save money, and
- encountering unexpected expenses.
If you’re able to identify these financial stressors, take time to sit down with your spouse or partner and look for ways to better manage the issues. You may find it difficult to make and commit to a plan if you’ve already been experiencing anxiety around financial issues, but if you can accomplish this step, sticking to the plan can help reduce your financial stress considerably.
As an example, if you sat down with your partner and discovered that staying on top of your bills has become a big issue, your plan of attack could include making some calls to set up payment plans.
If you have trouble keeping up with your power bill, for instance, some power companies allow their customers to set up an “equal billing” payment plan. This means your payments are the same amounts each month as it’s based on an estimate of your annual power usage. This has the potential to make things easier for you, but you likely won’t be told about this option unless you call and ask about it.
2. Budgets can help financial stress
It may sound trivial, but setting up and sticking to a budget plan can be a lifesaver for many who are experiencing financial stress.
Essentially, a budget is a plan you make to balance your finances, based on your income and your expenses. You’ll be able to look at your monthly income, add up your expenses, and discover whether you have any money left over. And, of course, we recommend any extra funds be added to a savings account or properly invested.
Once you’ve added all the details to your budget, you’ll be able to identify specific areas of concern. You might find an expense that’s much higher than you thought, causing you to rethink whether it’s necessary. Or you may decide to pay less for one service so you can pay more to another. Either way, you’ll be more in control of where the money goes.
Look at all your budgeting software options
Starting with a blank-slate budget can be nerve-wracking, but the benefits are worth any initial headaches. Luckily, there are plenty of budgeting software options available and these make the task much more manageable and convenient.
Here’s a breakdown of how popular certain budgeting methods are with different groups of Canadians:
Digital tools include things like spreadsheets, apps, or other software, whereas traditional methods involve physical cash separated into jars or envelopes. Neither is any more viable than the other, but it’s important to take the time to find the method that works the best for you.
Keep in mind that your budget will need to be revisited on a regular basis since your income, spending habits, and goals will vary from year to year. It’s recommended that you look at it either every 6 months or every year, as well as any time your financial situation changes.
3. Alleviate financial stress by paying down the big stuff first
Now that you’ve created a budget, you should be able to identify which are your largest and most pressing debts. And identification is the first step toward elimination.
If, for instance, your budget shows that your student loan is the largest debt you have, or even if it’s the one with the highest interest rate, you’ll want to focus more energy on paying it down. Paying more than the minimum amount each month is a good idea, even if it’s only a few dollars more than what’s required.
Setting up automatic payments for your largest bills can be a good idea too. It’ll be one less thing you have to remember to do each month, providing you with much-needed peace of mind.
Consider debt consolidation
On the other hand, if your budget clearly shows that your finances are becoming too much for you to truly handle, you may want to start looking at other options. Debt consolidation is when you take out a new loan with low interest and use it to pay off 1 or more higher interest loans.
That way you save money on interest and simplify the whole process by only having one place you need to pay off.
Curious to learn more? Read here for all the details of debt consolidation and how it can help.
4. Financial stress can be lessened with better savings habits
It may be that you simply don’t have the funds to set much aside in savings, but maybe you just don’t know the most effective ways to save money.
And yes, it might seem overwhelming at first, but creating an emergency savings fund will be very beneficial in the long run, for several reasons. Even if you just start small and simple, setting and sticking to a savings plan can alleviate your anxiety and offer a much-needed sense of accomplishment – and provide a financial safety net, of course.
Creating a savings account, even if it’s small, can provide a feeling of control and security, which goes a long way toward reducing your financial stress.
One of the best ways to build your savings is to use a high interest savings account. Simply put, a high interest savings account, or HISA, is an account with a higher-than-average interest rate that allows your savings to grow faster.
The Motive Savvy Savings Account is one of the top HISA options in Canada, offering an impressive 2% interest rate for no monthly fees at all.
You can learn more about this account right here:
The Motive Savvy Savings Account is pretty basic as far as features go – but it makes up for it with its high interest rate and overall lack of fees. Currently at 2%, this is one of the best high interest savings accounts you can get right now in Canada.
- A high 2% interest rate
- Unlimited transactions and Interac e-Transfers
- Application requires a hard credit check
- Unavailable in Quebec
- Valuable high interest rate
Some tools and resources for combating financial stress
As well as the few we briefly mentioned above, there are quite a few tools and services available for anyone struggling with financial stress.
If you find that even your best efforts to alleviate your stress on your own aren’t successful, here are a few products and resources you can turn to for effective help.
5. Balance transfer credit cards can help with financial stress
A balance transfer credit card can be a convenient and valuable way to deal with financial stress, particularly if significant credit card debt is part of the problem.
Take a look at the selection of top balance transfer credit cards in Canada.
| Credit card | Welcome bonus | Rewards | Annual fee, income requirements | Apply now |
|---|---|---|---|---|
| MBNA True Line® Mastercard® |  $100 GeniusCash + 0% interest on balance transfers for 12 months (terms) | None | * $0 * None | Apply now |
| BMO CashBack® Mastercard®* | $20 GeniusCash + 5% cash back for the first 3 months, plus $50 cash back (terms) | * 3% cash back on groceries (up to $500 per month) * 1% cash back on recurring bill payments (up to $500 per month) * 0.5% cash back on all other purchases | * $0 * $15,000 personal | Apply now |
| Scotiabank Value Visa | * 0% interest rate on balance transfers for the first 6 months * Annual fee waived for the first year | * None | * $29 * $12,000 personal | Apply now |
Get the best balance transfer card on the market AND $100 GeniusCash
$135 GeniusCash + 0% on balance transfers for 12 months (3% fee) + No annual fee.*You could get a 0% promotional annual interest rate (“AIR”)† for 12 months on balance transfers✪ completed within 90 days of account opening (3% transfer fee). Conditions and fees apply. And keep the savings going with low interest rates of 12.99% on purchases and 17.99% on balance transfers afterwards (24.99% on cash advances).
- Genius Rating:
- Rewards rate: N/A
- Our credit estimate: Good (660-725)
- Welcome bonus: N/A
- Annual fee: $0
- Interest: 12.99% on purchases, 24.99% on cash*
- Balance transfer: 0% for 12 months (3% fee)
- * See rates and fees
- It'll take you to the bank's secure site.
- You'll get the chance to read the offer and product details.
- If you choose to apply, filling the form should take between 10 to 15 minutes.
GC: $135
- It'll take you to the bank's secure site.
- You'll get the chance to read the offer and product details.
- If you choose to apply, filling the form should take between 10 to 15 minutes.
This offer is not available for residents of Quebec.
The MBNA True Line Mastercard is our pick for the best balance transfer credit card in Canada. It’s specifically designed to save you money on credit card interest – as proven by its 12.99% rate for both purchases and balance transfers.
But then there’s the welcome offer of 0% interest on balance transfers for 12 months (terms), which is pretty sweet. In case you're still on the fence about it, we've thrown in our own $100 GeniusCash bonus for this card too.
Combine a balance transfer with cash back rewards for later
$20 GeniusCash + Up to 5% cash back + No annual fee.*The BMO CashBack Mastercard is a no fee credit card that puts you in control and lets you choose when you receive your cash back rewards. To start, you'll get up to 5% cash back in your first 3 months.*
- Genius Rating:
- Rewards rate: around 1.01%
- Our credit estimate: Good (660-725)
- Welcome bonus: up to $100* (Ends 2026/01/31)
- Annual fee: $0
- Interest: 21.99% on purchases, 23.99% on cash*
- Balance transfer: 0.99% for 9 months (2% fee)
- * See rates and fees
- It'll take you to the bank's secure site.
- You'll get the chance to read the offer and product details.
- If you choose to apply, filling the form should take between 10 to 15 minutes.
GC: $20
- It'll take you to the bank's secure site.
- You'll get the chance to read the offer and product details.
- If you choose to apply, filling the form should take between 10 to 15 minutes.
Another top choice for a balance transfer card is the BMO CashBack Mastercard. Right now, new cardholders can enjoy 0.99% interest on balance transfers for the first 9 months they have it in their wallet, plus a 2% balance transfer fee. This offers an excellent opportunity to help you pay down your debt at a significantly reduced rate.
And once you’ve taken care of that pesky balance, this $0 annual fee Mastercard can earn you 3% cash back on groceries (up to $500 per month), 1% cash back on recurring bill payments (up to $500 per month), 0.5% cash back on all other purchases – a reward system that can help your financial stress.
Pay a flat fee to transfer your balance to this low interest card
The Scotiabank Value Visa offers a low rate of 0.99% on balance transfers* for the first 9 months, and then enjoy permanent low interest rates of 13.99%.
- Genius Rating:
- Rewards rate: N/A
- Our credit estimate: Excellent (760-901)
- Welcome bonus: N/A
- Annual fee: $29, 1st year free
- Interest: 13.99% on purchases, 13.99% on cash*
- Balance transfer: 0.99% for 9 months (1% fee)
- * See rates and fees
- It'll take you to the bank's secure site.
- You'll get the chance to read the offer and product details.
- If you choose to apply, filling the form should take between 10 to 15 minutes.
- It'll take you to the bank's secure site.
- You'll get the chance to read the offer and product details.
- If you choose to apply, filling the form should take between 10 to 15 minutes.
The Scotiabank Value Visa can offer relief from financial stress with its low fee, low interest rate, and an enticing balance transfer offer.
Once you’ve paid off the amount you transfer over, it can be a handy addition to your wallet for everyday purchases.
6. Banks and lenders can be sympathetic to financial stress
Sometimes the problem is just that certain loan payments are too high for you to make each month. Sure, you want to pay down those debts, but the monthly amounts are just slightly higher than your budget allows for.
Often, all it takes is a quick call to your bank, lender, financial institution, or what have you. They might be more willing to help than you think, even if it’s just a short-term solution. Here are a few examples of what these institutions could offer:
- extending the term of your loan,
- lowering your interest rate,
- reduce your monthly payments,
- offer refinancing options.
You’ll never know how your lender might help until you ask.
7. Lessen financial stress by asking for a raise
One surefire way to ease your financial burden is to make more money. And one way to make more money is to ask for a raise.
Of course, you’ll want to consider this carefully before approaching your employer with the idea. Here are a few things to think about first:
- Can you offer a few clear examples of when and how you went above and beyond your job expectations? The more specific you can get, the better.
- Consider when to ask. During or around a performance review is ideal, but after hearing news of company cutbacks or declining annual revenue may not be wise.
- Look at what the industry standard is for someone in your position, with your level of education, experience, etc.
- Be prepared with the specific raise amount you want to receive.
An alternative to asking for a raise is to ask for other benefits, such as a more flexible work schedule, performance-based bonuses, or even better medical insurance. All of these can still aid in overcoming financial stress.
8. A side hustle can help lower your financial stress
A side hustle can be both an enjoyable and lucrative solution to financial stress, particularly if you dislike your job or have been denied a raise. Side hustles often don’t even feel like work, for those who find the right one.
When considering a side hustle, you should choose something you think you’ll enjoy. Ask yourself how you like to spend your free time, and see if you can come up with a way to monetize the things you enjoy.
For instance, if you’re a big reader, you may be able to write book reviews to earn a few extra dollars. Or if you love animals, pet sitting or dog walking could provide additional funds while spending time with some new furry friends.
Here are a few popular side hustles that are relatively easy to get started:
- language tutoring,
- pet sitting and/or walking,
- house sitting,
- transcription work,
- food delivery, and
- driving for a rideshare company.
Many of these ideas allow you to create your own schedule, so you’ll be able to work around your day job, family obligations, etc. Plus, you’ll be able to decide how much effort you want to put in.
Taking care of yourself – and letting others help – can alleviate your financial stress
Perhaps the most important part of coping with financial stress is to take care of yourself – and to let others take care of you too.
Financial stress is stress, plain and simple, and stress can wreak havoc on both your mental and physical health. Taking time and taking care is essential.
9. Let your loved ones know about your financial stress
Having a support system can make all the difference during times of stress, whether it’s financial stress or any other type.
As mentioned earlier, financial stress is common among Canadians, so it’s possible that one or more of your family members and/or friends have experienced something similar to what you’re going through. Try to talk to your loved ones about the things you’re worried about, and be open to the advice they may have.
But while communication with your friends and family members is very important and usually helpful, there are times when it won’t be enough. Sometimes, consulting a professional therapist or even a physician may be needed. While it can be extremely difficult to take that first step and ask for professional help, it can make a remarkable difference.
No matter who it is, though, talking to someone about what’s bothering you should be one of the very first steps you take.
10. Experiencing financial stress means self care is needed
A recent Stats Canada study reported that 43% of its participants reported that aspects of their finances caused them to feel significant levels of anxiety. In fact, 40% of Canadians feel that their mental health is significantly affected by their debt levels.
Really, mental health and financial health are linked in a sort of cyclical manner – experiencing financial stress can lead to the deterioration of your mental health, and deteriorating mental health can also affect your financial health. It’s important to practice self care so you don’t get stuck in this cycle forever.
Simply acknowledging that you’re stressed and your mental health is suffering can be a huge first step towards healing. After that, try to take care of yourself and your problems in a structured way. Take time to unplug from electronics so you can fully relax, maybe try meditation, or even just go for a walk.
A huge part of self care is to maintain a healthy lifestyle. As horribly difficult as it may seem, regular exercise can do wonders towards clearing your mind and lifting your spirits. And when your mind is clear and spirits are high, it can be easier to make tough decisions, whether they’re about financial matters or something else entirely.
Once you’ve taken this time to care for yourself, then you should set aside a block of time to look at your financial situation. Don’t try to tackle these issues if you’re already overwhelmed – it won’t do anyone any good, especially you!
How will you manage your financial stress?
As you can see, there are many reasons why people experience financial stress, and many ways for solving the underlying issues.
Have you experienced significant financial stress? How did you deal with it? Do you have suggestions to add to our list?
We love hearing from our readers, so feel free to leave comments and advice in the section below.
FAQ
What are the financial stress and mental health statistics? What’s the correlation?
There is a clear correlation between financial stress and mental health, as shown by FP Canada’s 2022 Financial Stress Index (which you can read about here). Financial matters are one of the top reasons why Canadians feel stress, and this directly affects their mental health. Here, you can read our suggestions for how to take care of yourself during these stressful times.
Are there tips for how to deal with financial stress?
There are many tips available for those dealing with financial stress, but there are 2 ideas that are emphasized most often. First, identifying the specific cause or causes of your financial stress can go a long way towards solving the problem(s). But also, taking care of yourself and your mental health is essential. Talk to your loved ones about the stress you’re experiencing, allow them to help you, and try to practice self care whenever possible.
Can you offer stress management strategies?
One of the first steps to take in stress management is to identify the source of your stress. Once you’ve figured this out, there are various strategies that can help you feel better. Some people need to spend time relaxing and practicing self care, but some will feel better by creating a plan of attack and making life changes to avoid specific stressors. Either way, we recommend speaking to a professional about your stress, whether that be a therapist or a physician.
Is it true that financial stress in marriage is very common?
Unfortunately, yes, financial stress is the cause of relationship issues for many couples. In fact, one study showed that couples who fight about money more than once per week are 30% more likely to separate. There are ways to help alleviate this type of stress in your marriage, though, and you can read about some of them here.
How can I help others lower their financial stress?
To help your loved one(s) experiencing financial stress, it’s important to let them know that your support is available if and when they need it. As with any stress or mental health situation, support from family and friends is important for the one who’s suffering, but they may not know how to reach out for help. Do what you can to let them know you’re ready and willing to help, and hopefully they’ll reach out when they’re ready.
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