At a time when more Canadians are struggling with personal debt than ever before, a powerful truth is emerging: financial education is coming too late for many. National data backs this up – according to the 2025 RBC Financial Flexibility Poll, 55% of Canadians describe themselves as financially paralyzed, while 59% say they feel stressed about money daily. But beyond the headlines, Spergel’s own 2024 study, Debt Load and the Impact to Psychological Wellbeing, dives deeper – giving voice to Canadians who have experienced the weight of debt firsthand.
In our survey of past clients, 91% reported moderate to extreme stress due to their debt, with 67% saying they felt “extremely stressed”. These aren’t just numbers – they reflect sleepless nights, social isolation, and overwhelming anxiety. The most troubling part? Many didn’t fully understand how they got there until it was too late. These findings expose a key vulnerability in our financial system: Canadians are entering adulthood – and even midlife – without the foundational financial knowledge to avoid common debt traps. In this article, we explore why that needs to change, and how earlier financial education could prevent the emotional and financial fallout so many are now facing.
The emotional cost of financial illiteracy
While the financial burden of debt is well known, its emotional impact is often underestimated. Debt can chip away at a person’s sense of control, confidence, and self-worth – especially when they feel they should know better. Many survey respondents described intense shame, isolation, and fear of judgment, which often stopped them from seeking help sooner.
This emotional toll isn’t just tied to the debt itself, but to the confusion and self-blame that come with it. Without foundational knowledge about credit, interest rates, and budgeting, many relied on quick fixes – credit cards, payday loans, lines of credit – without realizing how easily they could spiral. It’s not a lack of discipline. It’s a lack of early, accessible financial education.
Why we need to start financial education sooner
Too many Canadians are learning how to manage money only after things go wrong. In our study, 75% of respondents said they didn’t seek help until their debt became unmanageable – and most had no idea that financial or mental health support was even available. These are signs of a reactive system – one where people only learn to manage money after experiencing the pain of mismanaging it.
This isn’t just a personal failing – it’s a systemic gap. Financial education is often optional, inconsistent, or introduced far too late. By the time most people understand how interest works or what a budget actually looks like, they’re already juggling bills, rent, and loan repayments.
Imagine if those lessons came earlier – before the stakes got so high. Concepts like budgeting, saving, managing credit, and avoiding high-risk borrowing could be taught just like math or science: gradually, practically, and without stigma. Early financial education wouldn’t just prevent financial missteps – it would equip young Canadians with a sense of control, clarity, and emotional resilience.
Young Canadians are most at risk
Canadians under 44 are facing a perfect storm: rising living costs, unstable job markets, and easy access to credit – without the financial literacy to navigate it. In our recent study, younger adults were more likely to cite job loss, overspending, and a lack of emergency savings as key contributors to their debt. While job loss can’t always be prevented, many of the financial decisions that followed – relying on high-interest credit, skipping rent to pay off minimums, or ignoring bills altogether – were driven by panic and inexperience, not irresponsibility.
With the right financial education early on, many of these outcomes could have been avoided. Teaching the basics – like how to build a buffer, set spending boundaries, or differentiate between needs and wants – could empower young adults to make clearer, calmer financial decisions, even in tough times.
Financial education as a tool for mental wellness
The connection between financial stress and mental health isn’t just anecdotal – it’s well documented, both in Spergel’s study and in national research. But early financial education can be a powerful form of prevention, not just crisis management. When people understand how to budget, manage credit, and recognize the warning signs of unmanageable debt, they’re better equipped to handle setbacks without feeling shame or panic. Knowledge builds resilience. It also empowers people to ask for help sooner and make informed choices about debt relief options like consumer proposals or bankruptcy.
At Spergel, we’ve seen how transformative that support can be. After going through the insolvency process with our team of experienced Licensed Insolvency Trustees, 90% of clients reported a long-term improvement in their mental wellbeing, and 63% said their stress levels significantly dropped. These aren’t just financial outcomes – they’re emotional ones. And they prove what’s possible when Canadians are given the tools and support they need to take control.
Taking action starts today
We can’t afford to treat financial literacy as an afterthought any longer. If we want to break the cycle of debt and distress, we need to prioritize financial education – starting early, and making it accessible to everyone. But while financial education is the long-term solution, many Canadians need help right now. That’s why accessible tools, expert guidance, and non-judgmental support matter just as much. Whether you’re trying to get ahead, get back on track, or help someone else do the same, there are resources available – and a way forward.
Why financial education needs to start earlier: FAQs
Here are some of the most common questions we’re asked about financial education:
What is the meaning of financial education?
Financial education means learning how money works – how to earn it, save it, spend it wisely, borrow responsibly, and plan for the future. It gives people the knowledge and skills to make informed decisions about things like budgeting, credit, debt, investing, and protecting their financial wellbeing. Ultimately, financial education helps individuals feel confident and in control of their money, rather than overwhelmed by it.
What is an example of financial education?
An example of financial education is learning how to create and stick to a monthly budget. This helps you track your income and expenses, avoid overspending, and plan for future goals. Other examples include understanding how credit cards work, how to build an emergency fund, or how interest rates affect loans and savings.
What is the objective of financial education?
The objective of financial education is to empower individuals with the knowledge and skills they need to make informed money decisions – avoiding costly mistakes, managing risk, and building long‑term security. It aims to boost financial confidence, reduce stress around money, and foster habits (like saving, prudent borrowing, and investing) that support personal and community economic wellbeing. Ultimately, effective financial education seeks to break cycles of debt and vulnerability by equipping Canadians to plan, adapt, and thrive over their lifetimes.
Resources to help you take control
Whether you’re just starting to learn about personal finance or looking for help managing your debt, these free tools and services from Spergel can help you take the first step toward financial wellbeing:
- FREE Budget Tracker – use our simple budget tracker to get clarity on your income, expenses, and spending habits.
- FREE Spending Tracker – track your daily purchases and spot spending patterns that could be holding you back.
- Spergel Learning Centre – explore expert articles, guides, and videos on budgeting, debt relief options, credit management, and more.
- Debt Relief Calculator – see how much you could save with a consumer proposal or bankruptcy, based on your unique financial situation.
- Speak to a Licensed Insolvency Trustee – book a free, confidential consultation to explore all your debt relief options.
- Mental Health Support – get free, 24/7 help through organizations like CMHA, Kids Help Phone, and ConnexOntario.
Need help now? You’re not alone – and there’s a path forward. Speak to a Licensed Insolvency Trustee at Spergel to explore your options and regain control of your finances.
