Are you struggling with debt?
Whether you’ve experienced job loss, a health issue, or you never learned how to manage your money, you’re not alone. Life is unpredictable and dealing with your finances is hard if you’ve never been taught how to do it, or ways to handle debt.
Feelings of guilt, embarrassment, and shame often accompany debt. Since no one wants to share their money mistakes, dealing with debt can be very isolating. You might feel like you have to navigate debt alone, but you don’t. Help is available.
One of our trusted Licensed Insolvency Trustees (LIT) can work with you to create a plan to take control of your debt and rebuild your finances, one step at a time.
In this article, we’ll take an honest look at how debt affects Canadians and outline what you can do to improve your financial situation.
Canadians in Debt Statistics
While you might feel like the only one drowning in debt, the statistics tell another story. Total consumer debt in Canada hit $2.5 trillion in the final quarter of 2024. Canada has the highest household debt among the G7, and the average non-mortgage debt per consumer is $21,931.
While everyone has a different story on how their debt troubles started, there are many common drivers including job loss, low personal income, poor financial decisions, illness, divorce, the death of a loved one, and a high cost of living.
Why Debt Makes You Feel Ashamed
In a capitalist, social-media-obsessed society, it’s easy to attach your self-worth to your net worth. If you’re deep in debt and can’t afford the house, clothes, and lifestyle that all your friends appear to enjoy, this can leave you feeling small and ashamed. You may start asking questions like:
“Why can’t I afford all the things my friends have?”
“Where did I go wrong?”
“Why can’t I save money?”
What is it about debt that makes us feel so guilty?
Is it because debt is tied to our sense of moral obligation? When we owe someone, we feel less in control of our finances which can create anxiety and shame – until we can pay our debts and be even.
Is it because our society seems to value financial success over everything else?
Whatever the reason, debt can leave you feeling physically weighed down and can negatively impact your health.
How Debt Can Affect Your Mental and Physical Health
If your debt has you feeling sick and tired, it’s not in your head. Research shows that debt can have a damaging effect on your mental and physical health.
Debt is associated with higher rates of stress, depression, high blood pressure, increased rates of obesity, and other mental health issues.
Studies also show that the context of debt matters.
When debt is used for positive reasons, such as buying a house or going to school, it’s often associated with good health.
On the flip side, taking on debt to try and pay bills and make ends meet with the help of payday loans or credit cards, is typically associated with negative health.
The adverse effect of debt on physical and mental health can be explained in a few different ways.
- Perception. When you’re anxious about your debt it can have a negative impact on your mental health. Juggling multiple debts can feel exhausting. Choosing whether or not to pay your rent or keep the lights on is a stressful situation.
- Behaviours. When you don’t have enough money to cover your basic needs, it may cause you to eat poorly, skip meals or skip your medication. All of these behaviours can have serious effects on your physical and mental health.
How to Overcome Debt and Improve Your Health
Being in a spiral of debt and shame can feel unmanageable. While it might seem like there’s no way out, it is possible to break free and improve your finances and health. Here are actions you can take to start moving forward, one step at a time.
- Improve your financial literacy. Knowledge is power, especially when it comes to finances. Increasing your understanding of personal finance basics like how to create a budget, manage credit, and plan for the future can help you take control of your finances. Start listening to financial podcasts, reading websites, and taking out books from the library. All of this can be done for free.
- Budgeting. Understand how much money you have coming in each month and how you’re spending it. See if there are areas where you can cut. Then put any extra money towards building up your savings or paying your debt. If you need help, speak to a LIT about credit counselling services.
- Increase your income. Consider how you can bring in additional income. Can you take on more shifts at work, a part-time job, or start a side hustle? Use any additional income to pay off your debt.
- Build an emergency fund. Depending on where you are on your debt journey, this might feel like an impossible goal. But even putting $5-$10 per month into an emergency fund is a good start. Knowing you have some money set aside in case of an unexpected expense can provide peace of mind.
- Speak to an expert. If your debt is consuming you and you need help, speak to a Licensed Insolvency Trustee. Trustees are debt professionals who have the knowledge and experience to get you on the path to financial freedom.
- Consider debt relief solutions. If you’re unable to pay your bills, a LIT might suggest a more formal debt relief solution like a Consumer Proposal or Bankruptcy. While the thought of filing for Bankruptcy might make you feel even more ashamed, this is not the purpose. Formal debt relief solutions are meant to give honest debtors a second financial chance, and these solutions can provide a great deal of stress relief.
Struggling With Debt? Speak to a Licensed Insolvency Trustee
No one is immune to debt. It is not a moral failing. Life is expensive and unpredictable and debt can happen to anyone for any number of reasons. If you’re feeling isolated or ashamed due to debt, remember, you aren’t alone. Most importantly, you don’t have to deal with your debt alone. A Licensed Insolvency Trustee can assess your debt and work with you to create a path forward towards financial freedom. They have heard many different reasons for falling behind financially, and some have even experienced it themselves! Whether you need help creating a budget, or you need to file for Bankruptcy, a LIT can offer the widest range of debt solutions.
Give us a call at 1-888-371-8900 for a free, no-obligation consultation, or book an appointment online.
