While they might not always show it, children are incredibly sensitive to everything going on in their parents’ lives. It’s therefore not surprising that the stress caused by parental debt could have an impact on kids.
In 2021, results of a study revealed a significant connection between being poor and a child’s well-being. It showed that not having basic needs met negatively affected a child’s academic and behavioural well-being. This research also indicated that children in families struggling financially were more likely to internalize or externalize negative emotions.
So, does this mean that having parental debt means your children are destined to have behavioural issues? No. Absolutely not. The study didn’t find a direct cause-and-effect relationship between debt and behaviour issues. Researchers believe that the big difference is in how parents reacted to debt and how they parented their children.
Canadian Families Drowning in Debt
Canadian parents are drowning in record amounts of debt. According to Statistics Canada, as of the end of 2025, Canadians have $2.65 trillion in consumer debt, $195 trillion of which is mortgage debt. Credit card debt made up a whopping $131 billion. That’s $22,321 in non-mortgage debt each and around $1.77 in debt for every dollar in disposable income that Canadians earn annually. Most concerning is that, comparing the end of 2024 to the end of 2025, delinquency rates increased by over 5%.
Given the results of the study, you might be wondering how it’s affecting your children and what you can do about it.
What You Can Do
If you are in debt and you’re worried about how that debt may be affecting your children, there are steps you can take.
Go see a financial advisor
A professional will be able to help you come up with a plan for getting out of debt. This won’t just help you get out of debt faster, but it will likely also help reduce the stress that you feel about your debt. This will create a happier atmosphere at home and allow you more time to spend with your children, creating an environment that is conducive to their healthy growth.
Go see a counsellor
If you’re overwhelmed by your stress and anxiety, it makes sense to see a counsellor to speak about your feelings. By speaking about the source of your stress, you can come up with solutions for how to tackle it. You can also talk to a counsellor about any concerns you have about your children’s behaviour. They will likely be able to offer you suggestions for how to navigate them in a healthy way. If you’re worried about the cost, ask your doctor about free or low-cost options in your community.
Protect your children
If your children are acting out and you think it might be related to your stress about your debt, look for ways to cushion them from discussions about money. Children don’t understand something like debt, but they do understand when they see their parents stressed out or anxious. Try to avoid discussing money matters around your children if you can’t do it without your anxieties bubbling up. That being said, it’s still important to talk to them about money and money management so that they build a strong foundation in financial literacy. Just do your best to have these discussions when you’re in a cool, calm, collected mindset.
Talk to your kids
If you think your children are concerned about your debt, be open with them about the financial issues. Just do so in such a way that is age-appropriate and doesn’t leave them burdened. Reassure them that you’ve taken steps to manage things and that everything will be okay. This will help them feel more secure and comforted, and could go a long way to helping address any behavioural issues.
If you’re in debt, this study is a great reminder that your children are listening and watching and that your actions have an impact on them. No one wants their children to suffer because of parental debt or stress about money. By protecting your children and taking action to reduce your stress around your debt, the whole family will feel better.
Image Credit: korycheer
