Coping with the mental health effects of financial stress

Coping with the mental health effects of financial stress

Financial stress is a common source of tension for individuals, couples & families at the moment. It is a topic which comes up regularly at the clinic during couples counselling & individual therapy, and we have noticed that it is coming up more and more as interest rates have soared, the cost of living has increased, and repayments on credit cards, lines of credit and mortgages have doubled, and in some cases tripled. So we wanted to open a discussion here about it.

Unsurprisingly, this is such an issue at the moment since the cost of living in GTA has been rising over the last few years. This has been driven by inflation, increased housing costs, and higher food prices. According to Statistics Canada, the inflation rate was 6.2% higher in January 2023 compared with 2022 and 4.2% in December 2021, up from 2.7% in December 2020.

Financial Stress and Mental Health

One of the biggest impacts that financial stress can have is on your mental health. The stress of not being able to pay bills, make ends meet, or cover unexpected expenses can lead to chronic stress, with well-documented impacts on health. Poverty-related stress is a well-researched area of Psychology, it has been shown time and time again that financial problems lead to a range of psychological problems such as anxiety, depression and an increase in aggression. It can also impact other areas of life such as relationship problems. 1.

Money provides access to food, water and shelter which is considered a basic, physiological need by Maslow. 2.  Any threat in this area whether it is perceived or actual, like the loss of a job for example, can have a big impact on a person’s mental health and as a consequence their emotions and behaviour. We have listed below some emotional & behavioural symptoms to watch out for. 

Emotional Symptoms

  • Low Mood: Feeling low, sad, and blue. Not wanting to take part in the things which used to make you feel happy and finding even basic tasks difficult to carry out.
  • Helplessness: Feeling like there is no hope in the situation and there is no point in trying to fix or resolve anything. 
  • Overwhelm: Busy thoughts and an overactive mind as well as a feeling like everything is piling up on top of you and it’s just too much to handle.
  • Fear: Feeling fearful of the situation and what might happen in the future, imagining worst-case scenarios which keep you stuck.
  • Shame: Carrying a feeling of shame with you and not wanting to tell anyone about the situation because you are so embarrassed to have got yourself in this position. 
  • Anxiety: Anxious thoughts about the future and what might come, you might experience racing thoughts, fast breathing and panic attacks.
  • Depression: Feeling low and down and unmotivated to do anything about the situation. 
  • Irritability or moodiness: Financial stress can make people irritable, short-tempered, or easily frustrated.

Behavioural Symptoms 

  • Constantly worrying about money: Someone experiencing financial stress may constantly check their bank account, and worry about bills and debts piling up.
  • Difficulty sleeping: Financial stress can cause insomnia or other sleep disturbances, as a person’s worries and anxieties keep them up at night.
  • Physical health problems: Chronic stress can lead to physical health problems such as headaches, stomach issues, high blood pressure, and more.
  • Changes in appetite: Some people may experience a loss of appetite or overeating when they are under financial stress.
  • Avoidance behaviour: People may avoid activities or social situations that involve spending money, such as going out to eat or buying gifts for others.
  • Increased Drinking: Drinking is a common way to relax and de-stress this can quickly escalate from an occasional drink to regular daily drinking and become an issue.
  • Increased Gambling: People on lower incomes who are struggling to pay for their basic needs are more at risk of gambling behaviours. 3.
  • Increased Use of Substances (illegal or legal): Similar to drinking, substances are used to de-stress or even avoid and cover up feeling negative emotions linked to financial stress.

Removing the shame of financial struggle

If there is one message that we want you to take away today, it’s that there is no shame in going through a financial struggle. Financial health is linked to the beliefs, attitudes and even education that we received early on in childhood.   

The experience of a person who grew up in a household where finances were talked about openly is different from someone who grew up in a household where money was a taboo subject. Someone who got taught about how to manage their finances and was helped to build healthy habits like saving is more likely to adopt good financial planning in adult life.  

For many people, being educated about finances just didn’t happen, and then, crisis hits in adulthood and they wonder why it’s difficult to manage the finances. Money management is a skill like any other, it’s one of the best ways we can learn to look after ourselves and our families as a form of self-care. But, if this isn’t something that you have learned, if you have learned that money is hard to come by, that there is never enough of it or that the whole topic is best left untalked about and undealt with. Well, you might find that you struggle with money and there is no shame in that. 

The best way to deal with financial struggle is head-on, there is always a way forward. Often our perception of our situation is a lot worse than the reality, especially when we are dealing with the mental health effects of financial stress. To help you to move forward and begin to take action we have listed some useful, free resources below. 

Top Resources:

  • Financial Consumer Agency of Canada: The Financial Consumer Agency of Canada provides information and resources to help Canadians make informed financial decisions. They offer tools and calculators, as well as guides on topics such as budgeting, credit, and debt management.
  • Credit Counselling Canada: Credit Counselling Canada is a non-profit organization that provides credit counselling services, debt management programs, and financial education to Canadians. They offer confidential counselling services in person, by phone, or online.
  • MoneyGenius: MoneyGenius is a free personal finance resource for Canadians. This website can help you to save money and find the best deals across banking, credit cards, mortgage, investing, loans, insurance and software & services.
  • My Own Advisor: My Own Advisor can help you with financial planning and also motivation to keep going on your financial journey. It is normal to hit bumps in the road in life which can impact your financial position. My Own Advisor can help you navigate through those times and plan for the future.

These are just a few examples of the many resources available for GTA residents who are experiencing financial stress. It’s important to remember that there is no shame in seeking help and support when it comes to managing finances and that there are many resources available to help you regain control of your financial situation. 

How To Reduce Financial Stress with Practical Steps

It is important to address financial stress as part of an overall approach to managing mental health. Seeking financial advice, developing a budget, and seeking support from loved ones, or a couples counsellor can help manage financial stress and improve mental health. Overcoming this type of stress can be challenging, but there are several steps that you can take to improve your situation.

Create a budget: Co-creating a budget can help you both understand your income and expenses and make a plan for how to manage your finances. Start by listing all of your sources of income and all of your expenses, including fixed expenses like rent or mortgage payments, utilities, and food, as well as variable expenses like entertainment and shopping.

Reduce expenses: Look for areas where you can cut back on expenses as a couple. For example, you may be able to save money by eating at home instead of dining out, cancelling subscriptions or memberships you no longer use or shopping for discounts and deals.

Increase income: One or both partners might consider taking on a part-time job or freelance work. You might also be able to sell items you no longer need to generate extra income.

Seek financial advice: Consider speaking with a financial advisor or credit or debt counsellor who can guide you on how to manage debt, save money, and invest wisely.

Practice self-care: Both of you must take good care of your mental and physical health. Self-care can help you manage stress and improve your overall well-being. Activities like exercise, meditation, and spending time with loved ones can help you relax and feel more in control of your situation.

As well as accessing these resources and taking practical steps you might benefit from couples counselling or individual counselling. We can not address practical financial issues in the clinic however we can offer you a place to work through communication and emotional issues that may have surfaced due to financial stress. For more information book a session with one of our counsellors.



  1. Santiago, C. D. C., Wadsworth, M. E., & Stump, J. (2011). Socioeconomic status, neighborhood disadvantage, and poverty-related stress: Prospective effects on psychological syndromes among diverse low-income families. Journal of Economic Psychology, 32(2), 218–230. 
  2. McLeod, S. (2007). Maslow’s hierarchy of needs. Simply psychology, 1(1-18).
  3. Hahmann, T., Hamilton-Wright, S., Ziegler, C., & Matheson, F. I. (2020). Problem gambling within the context of poverty: A scoping review. International Gambling Studies, 21(2), 183–219.


Author: Cheryl Clarke graduated with a BA Hons in English Literature & Creative Writing, she is currently studying a MSc in Psychology at Northumbria University. Cheryl has also completed a teaching qualification in Mindfulness & Compassion and she writes about Mental Health and Stress.

Peer Reviewed: Trish McLean is the Director of The Story Isn’t Over.  She has worked in healthcare for 25 years. First, as a registered nurse and then as a counsellor and psychotherapist. Trish has a PhD in Theology at Edinburgh University in Scotland and has worked all over the world including in India, Uganda, the United Kingdom and, now, in Canada.

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