The rising cost of living in Canada is impacting many aspects of our daily lives. As prices rise for essentials like food, housing, education, and transportation, it’s important to remember the toll this can take on our mental health.
Luckily, there are several strategies to make sure you’re managing your mental health during this time.
Connection between financial stress and mental health
Financial stress is a common issue for many Canadians today, especially with rising costs of living. According to Statistics Canada, as of spring 2024, nearly half (45%) of Canadians reported that rising prices were greatly affecting their ability to meet day-to-day expenses, 12 percentage points higher than what it was two years earlier (33%). This financial strain can create uncertainty about current expenses and long-term financial goals.
Psychological effects of financial stress
Anxiety: Worrying about money can create financial stress. You could feel overwhelmed by bills, expenses, and the fear of not having enough. This can make daily tasks feel more difficult.
Sleep disturbances: Financial concerns can interfere with sleep. You may find it hard to fall asleep or stay asleep when your mind is racing with thoughts about money.
Increased tension in relationships: Money issues could potentially lead to conflict between partners or your family members. Disagreements about spending, budgeting, or future could create tension, so it’s important to talk to your partner about money.
Fear of the future: You may feel concerned about your future as well. Common worries could include:
- Raising a family: You may wonder if you can provide for your children’s future, like education costs or general well-being. You may also be concerned about starting a family.
- Buying a home: The dream of homeownership may feel out of reach as a first-time buyer.
- Retirement: Concerns about whether you’ll be able to save for your retirement.
Current cost of living trends in Canada
The cost of living has increased in Canada over the past few years. Some key trends that contribute to this include:
Rising debt levels: With the consistent increase in debt, you may be resorting to credit cards or loans to cover your expenses. This can lead to a cycle of debt that is hard to escape.
Housing affordability crisis: With high demand and high costs, it has become more difficult to purchase a home. If you rent, you may also be facing higher rent prices due to this.
Inflation: The general rise in prices for everyday items means that your family may have to stretch their budget further. Essentials like groceries and gas cost more, leading to difficult choices about spending.
By understanding these connections, you can take steps to help manage your stress. Seeking support from friends, family, or professionals, creating realistic budgets, and prioritizing self-care can all help in navigating these challenges.
Ways to manage financial stress with rising costs of living
Here are some ways to help you stay on top of your finances while prioritizing your mental health.
Review your finances and make a budget
Start by taking a close look at your current financial situation. Gather information on your income, expenses, and debts. This will give you a clear picture of where your money goes each month.
- Create a budget: A budget is a helpful tool that allows you to allocate your income towards essential expenses like housing, groceries, and utilities. Identify areas where you can cut back on non-essential spending. Budgeting can help you feel more in control of your finances and may potentially reduce anxiety about money.
Prioritize your mental health
Financial stress can take a toll on your mental well-being, so it’s important to prioritize self-care.
- Take breaks: Make time each day for activities that relax and recharge you, like going for a walk, reading, or spending time with friends.
- Practice mindfulness: Simple mindfulness exercises, like deep breathing or meditation, can calm your mind and help reduce stress.
- Seek support: Talk to friends, family, or a mental health professional about your feelings. Sharing your experiences can help lighten the load and provide new perspectives.
Build resilience
Building resilience helps you cope better during difficult times.
- Stay positive: Focus on what you can control and take small steps toward improving your situation. Celebrate your achievements, even if they feel small.
- Adapt and learn: View financial challenges as opportunities to learn and adapt. Explore new ways to manage your finances, such as finding additional income sources or learning about budgeting tools.
Enhance your financial literacy
Increasing your knowledge about finances can help give you a clearer picture about your financial situation.
- Utilize resources: Look for free online courses or workshops that teach budgeting, saving, and investing. Many organizations offer valuable information to help you understand personal finance better.
- Read books and articles: There are many useful resources available that cover various financial topics. Seek out materials that resonate with you and help clarify your understanding.
Plan for your future
While dealing with present financial stress, it’s essential to think about your long-term goals.
- Set goals: Identify your financial goals, whether that’s saving for a home, retirement, education, or building an emergency fund. Write them down and create a timeline for achieving them.
- Develop an emergency fund: If possible, try to set aside a small amount of money each month to build an emergency fund. This can help you prepare for when unexpected expenses arise and help reduce anxiety about the future.