The Hidden Link Between Financial Health and Mental Health

In Part 2 of our guest series from Mental Health Research Canada, the focus shifts to an increasingly relevant topic: the link between financial stress and mental health.

Drawing from national research, MHRC explores how economic pressures—like income instability, rising costs, and even tariffs—are shaping Canadians’ mental well-being, and why planning for the future may offer more than just financial benefits.

While much of our work focuses on tracking mental illness and identifying population-level risk, we’re increasingly being asked to explore how external stressors—particularly financial ones—shape mental health outcomes.

Financial health and mental health: A growing connection

Recently, many of the research questions we’ve been receiving have focused on the intersection of financial health and mental health. It’s a connection that’s become increasingly relevant in our national surveys.

We’ve been tracking this link across multiple factors—income, housing stability, food insecurity, ability to pay bills, and general economic uncertainty. In the last few months, we’ve even added questions about anxiety related to tariffs, reflecting public concern about both immediate costs and broader geopolitical shifts.

The data is clear: inability to meet financial obligations and sustained economic stress are significantly correlated with higher anxiety levels, and in some extreme cases, with suicidal ideation. In short, financial strain is mental strain—and that relationship needs to be part of the broader conversation.

How different groups experience the same stressor

Interestingly, our data reveals a divide in how different groups are affected by the same economic pressures. In the case of tariffs, for example, two distinct experiences emerged:

• Older, more affluent individuals reported increased anxiety tied to concerns about the deteriorating relationship with the United States and potential global economic instability.
• Lower-income individuals, on the other hand, viewed tariffs through a more immediate lens—as another cost-of-living pressure during a time of high inflation.

Both reactions are valid and underscore a crucial point: our mental health is not just shaped by what’s happening in the world, but by how we’re positioned to experience it.

You don’t have to be sick to benefit from better mental health

At any given time, about 8% to 10% of Canadians are living with a diagnosable mental health condition. Another 15% to 20% are at elevated risk. But mental health is something we all have—just like physical health. Sometimes it’s strong, sometimes it’s strained, but it’s always present.

Supporting mental health is not just about treatment for those who are struggling. It’s about prevention, resilience, and wellness—for everyone.

Planning as a mental health tool

Anxiety is, at its core, the fear of the unknown. Planning—by its very nature—is an attempt to consider that unknown future. And those who actively engage in financial planning tend to adopt a “future-focused” mindset: rooted in the present, but always looking ahead.

A thoughtful plan doesn’t erase uncertainty, but it helps to frame it—creating space to anticipate, prepare for, and navigate a range of possible outcomes. In doing so, planning can be a powerful way to offset anxiety and support both financial and emotional well-being.

Special thanks to the team at Mental Health Research Canada
www.mhrc.ca | info@mhrc.ca