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When we think of wellness, mental and physical health often come to mind first. Almost as important, however, is financial wellness, which can directly contribute to mental and physical health. Financial wellness encompasses financial health, financial well-being, and financial literacy. Having financial wellness translates into a person having a reasonable ability to meet their financial obligations, as well as the knowledge to manage their finances. 

Financial health refers to a person’s finances and their ability to meet their financial commitments. Financial well-being is more subjective, referring to a person’s attitude and confidence in managing their finances. Finally, financial literacy refers to the concrete knowledge and skills of a person allowing them to manage their finances and apply their financial knowledge to other aspects of their life as well. If any of those three items – financial health, well-being, and literacy- are affected, financial stress can occur.

Unfortunately, many Canadians struggle with financial stress, with 48% of Canadians admitting that they have lost sleep due to financial stress, and 44% saying that receiving a late paycheque would compromise their ability to meet their financial commitments. Financial stress isn’t limited to one age group or income level – Canadians from varying backgrounds, occupations, and financial situations can all experience financial stress. 

Check out how a credit card can help build your child’s financial knowledge.

What is Financial Stress?

Financial stress is fear, anxiety, and worry about one’s finances. There are many sources of financial stress, including general ones such as:

There are also more uncommon life happenings that can contribute to financial stress, including:

  • Divorce
  • Becoming a parent
  • Becoming a caregiver
  • Natural disaster
  • Job loss, and most recently for many people 
  • the COVID-19 pandemic

Effects of Financial Stress

Financial stress affects many aspects of your life, including your mental and physical health, personal relationships, and work. 

Mental Health

Financial stress has been found to directly affect your thoughts, feelings, and behaviours. Manulife reached out to some counsellors, who found that 74% of financial issues affect emotional health. There are various mental health symptoms of financial stress, including depression and anxiety. While these can be issues all on their own, depression and anxiety can leak into negative effects on your physical body and personal relationships as well. 

Physical Health

Financial stress can affect your physical body in the following ways:

  • Insomnia
  • Weight loss or gain
  • Muscle tension
  • Digestion Issues
  • Ulcers
  • Headaches
  • High blood pressure
  • Heart disease and heart attacks

Although Canadians have access to a free public health system, many countries like the USA for example, have citizens linking medical treatment directly to their finances. Since doctor’s appointments result in financial burden, people can miss out on seeing a doctor purely because of the financial expense, which can result in more health issues. 


If it weren’t enough for financial stress to impact your physical and mental health, it also has the ability to directly affect your performance at work. Money worries can cause an employee to feel distracted at work, with one study concluding that financially stressed employees are actually 5 times more likely to be more distracted at work. Other results of financially stressed employees can include:

  • Increased use of sick leave and absences
  • High employee turnover
  • Negative co-worker relationships
  • Difficulty concentrating
  • Low morale
  • Errors in day-to-day
  • Decreased quality of customer service

Employees who have a high level of financial well-being, on the other hand, have been found to directly contribute to positive results at work, including:

  • Higher engagement and morale
  • Lower number of absences
  • Higher productivity and focus
  • Lower turnover
  • Improved use of employee benefits

Personal Relationships

Financial worries have been found to cause strain on various personal relationships, including marriages, partnerships, familial relationships, and friendships. A study from SunTrust bank indicated financial stress to be the primary cause of conflict in 35% of romantic relationships. Financial stress has also been found to be the #1 cause of divorce. 

Families can have stress within their relationships because of financial stress when it comes to contributing to household expenses and borrowing money.   

Check out how to deal with debt in a marriage.

What Can You Do to Relieve Financial Stress? 

The good news is it is very much possible to relieve and manage financial stress. There are many ways to tackle your financial stress:

Reevaluate Your Budget

Creating a budget can help you attain financial freedom. First, you need to make a realistic outline of your income and track it against your expenses. Once you lay it all out, it’s easier to see where you can cut down on expenses. Budgeting apps can help you stay organized, as they provide you with alerts, the ability to keep everything in one place, ensure minimal tracking errors, and track your financial progress. 

Start Paying off Debts

Debt is an aspect of financial stress that is directly linked to mental health issues. Although it isn’t always possible to pay off all of your debt at once, it’s worth it to create a feasible plan for yourself to start paying off your debt in a timely fashion. This will free up some of your resources and in turn, result in less financial stress. 

Check out how to conquer your high-interest debts.

Save and Invest

Budgeting can help you save and set aside some of your money each month. An emergency fund is another great way to help you invest your money. An emergency fund is a savings account that is created with the intent of helping cover costs of unexpected expenses. Life is unpredictable, and sometimes you will be hit with a big bill, be it by medical expenses, loan interest, credit card debt, or utilities. Experts recommend having at least 1,000 saved in your emergency fund to help offset the mental and financial burden of an unexpected expense. 

A great account option for an emergency fund is a high-interest savings account, which can help you generate income through interest on your investment. Robo-advisors are a new investment platform that can also help you invest your emergency fund in a way that’s flexible and low cost.

Additionally, making transactions automatic in your bank account can help take the stress off of managing your savings. Decide on a date that is realistic with your income and expenses to have money automatically leave your bank account and be put away in savings. 

Seek Support

Sometimes, the stresses of life, including those stemming from finances, can be overwhelming to bear on your own. If financial stress is causing you distress, consider talking to someone you trust, or to a professional such as a therapist or credit counsellor. By opening up to a trusted friend or family member, you might come to realize that you aren’t alone in the struggle and that many of your peers also face financial stress, or have at some point in their life. If you don’t feel comfortable opening up to someone you know, you might want to consider seeing a therapist, financial advisor, or credit counsellor. 

Frequently Asked Questions

Can a credit counsellor help my financial stress?

Yes, credit counsellors can assist you in dealing with financial stress in many ways. Credit counsellors help their clients become more knowledgeable about finance and help them to create tangible plans to reduce their debt. They can also help negotiate with your creditors on your behalf to reduce late payment fees and sometimes even forgive some debt, as well as offer you one-on-one support in helping you create a budget and manage your finances. Overall, credit counsellors provide debt management solutions based on your debt and finances.

How do I pay off my credit cards quickly?

There are many ways to tackle credit card debt quickly. Since credit card debt can result in interest fees, it’s a good idea to assess your credit cards and pay off the debt with the highest interest first. Paying more than the minimum payment, if possible, on all of your credit cards is also a good way to pay off your debt faster. Finally, debt consolidation can help you pay off your credit card debt quickly, as it allows you to combine the balances of multiple high-interest cards and obtain a lower interest for all of your debt.

I have a hard time sticking to a budget? What can I do?

Keeping your budget on track requires a lot of attention and discipline. Fortunately, there are many tools to help you follow your budget, including budgeting apps, financial advisors, and prepaid cards. Prepaid cards are a particularly appealing option because they encourage people to spend only the money that they physically have available, rather than using credit.

Final Thoughts

Financial stress can affect people from all walks of life. Its toll on health can be intimidating, overwhelming, and seemingly hopeless at times. However, keeping a positive outlook and focusing on all the ways to manage your financial stress will help you to take control of your financial wellness and minimize worry. 

Chrissy Kapralos avatar on Loans Canada
Chrissy Kapralos

Chrissy is a Toronto-based communications advisor. With an English degree from the University of Toronto and editing courses under her belt from Ryerson University, she has continued her lifelong passion for writing and editing. In addition to working for Loans Canada on a variety of financial topics, Chrissy has a few years of resume writing and editing under her belt, and takes great pleasure in helping people find work that fits with their experience and passions. When she isn't working, you can find her practicing yoga, hanging out with her dog, reading up on financial and real estate news, or planning her next trip abroad.

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