Helping Employees Who Are Struggling with Financial Difficulties

Q: I have a small business and employ 12 people full time. One of my long-time employees briefly mentioned that he’s facing some financial difficulties. Other employees have been commenting on how moody he has become. I’m concerned for him as well as worried about how he is interacting with our customers. I did some reading online and found out that personal financial problems can have a big effect on a person’s mental outlook as well as their job performance. Any ideas about how I can help him?

A: When we see a friend, employee, co-worker or family member struggling to cope with everyday life it’s hard not to become concerned. Thinking that there might be more involved than we know about, makes it that much more disconcerting.

Without pushing your employee to share more than he’s comfortable sharing, here are some things you can do to help address two, possibly related, aspects of what he may be facing; the financial difficulties and emotional or psychological concerns.

Provide Employee Assistance Counselling

Many small companies don’t provide an employee assistance program. If this is due to cost, I would encourage you to either look for alternative insurance providers who have more flexibility with their pricing, or reimburse employees for certain services by having them submit receipts. Submitting receipts is not ideal for an employee who wants to keep their affairs private, so try to find a happy medium as you look for other insurance providers.

Educate Yourself About How You Can Help

You may know a lot about running your business, but the people aspect is complex and ever changing. Sign up for a course, read relevant materials or consult with experts who can help you understand how best to help employees when they are experiencing difficulties.

Don’t Underestimate the Significance of Financial Difficulties

There’s a lot in it for you as well as for your employee if his personal finances are in order. Unfortunately, many people wait much too long before seeking help and a vicious cycle develops: they are worried about money, which leads to making poor choices, and the result of the poor choices leads to more stress about money. The sooner someone gets help with their finances, the more options they will have available to them.

One way to help all of your employees is to provide fun, friendly employee lunch and learn workshops on various financial fitness topics.

How to Get Help to Deal with Debt

Encourage your employee to contact a reputable, non-profit organization like ours that helps people find workable solutions for their financial problems and learn to manage their money and debt better.

Employees who feel well financially, emotionally and physically are much more satisfied and a lot more productive all around. It’s a win-win for your bottom line as well as theirs.

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How Tariffs Could Increase Your Costs

Tariffs on goods don’t just affect businesses—they can trickle down to your wallet, too. For example, if the cost of importing agricultural products like fruits or meat goes up, grocery stores may pass those higher costs on to you. Similarly, tariffs on steel or electronics could make big-ticket items more expensive. The result? Your everyday expenses could climb, leaving less room in your budget for savings or debt repayment.

With over 70% of Canada’s trade tied to the States, tariffs can lead to higher prices for imported goods. Specific industries, like the automotive sector (Canada exports $50 billion in vehicles and parts to the U.S. annually), are likely to be affected, potentially increasing the cost of cars and repairs. To stay ahead of rising costs, look for ways to save money on groceries, by using budgeting apps or trackers. Consider switching to locally produced products or generic brands where you can also find savings on groceries.

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Budgeting and Building an Emergency Fund for Rising Costs

If rising costs are stressing you out, you may require adjustments to your budget to keep essentials covered. With $20 billion in agricultural products imported from the U.S., tariffs could drive up food prices making your budget unbalanced. Making the required adjustments to cover your essentials and building an emergency fund can help you stay on track.

Start by reviewing your budget and identifying areas where you can lower expenses. Even small changes can free up cash for essentials. At the same time, consider a financial reset, including allocating what you can to an emergency fund, no matter how small the amount. Over time, these contributions can add up, giving you a financial cushion when you need it most during uncertain times. If you receive a windfall, like a tax refund or bonus, consider using it to boost your emergency savings.

Debt Management Strategies in Uncertain Times

Tariffs and economic uncertainty may make debt repayment more challenging due to higher interest rates or reduced income. Prioritizing debt can help reduce financial stress and free up cash flow, ensuring you stay on top of your obligations. Focus on paying down high-interest debt first, such as credit cards or payday loans, as these cost you the most over time. Resist looking for information about bankruptcy chapters because those are American. If you’re struggling or unsure where to start, contact one of our Credit Counsellor for a free and confidential session to answer your questions and explore options like debt consolidation or a debt management program.

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Planning for Irregular Income

Tariffs may lead to job instability or reduced hours, especially in industries tied to U.S. trade. Keeping a flexible budget can help you manage fluctuating cash flow and ensure you can cover essential expenses, even when facing reduced income. Start by creating a variable income budget that lists essential expenses and prioritizes them. If you have high-earning months, set aside a percentage of those pay cheques to cover low-earning months. You might also want to explore side hustles or gig opportunities to supplement your income. Taking steps before reduced income happens can prevent a lot of stress if you do see a dip.

What to Do If You’re Laid Off

With 2 million Canadian jobs tied to U.S. trade, job loss is a possibility during economic uncertainty. Having a plan can help you stay afloat while you search for new opportunities. Government programs and community resources can provide temporary support during this challenging time.

If you’re laid off, apply for Employment Insurance (EI) benefits as soon as possible to access temporary financial support. Next, prioritize essential expenses and cut non-essentials, such as entertainment or subscriptions. Finally, update your resume, network, and explore temporary work or retraining opportunities to get back on your feet.

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Long-Term Financial Planning Amid Uncertainty

Tariffs and economic shifts can disrupt long-term goals, but staying flexible can help you adapt. Regularly revising your financial plan ensures you stay on track, even when circumstances change. Reassess your savings goals, such as homeownership, retirement, or education, and adjust timelines as needed. If rising costs are making it harder to save, consider extending your timeline or reducing your monthly contributions temporarily. Additionally, diversify investments to reduce risk during economic volatility.

How to Decide If Downsizing Your Home to Pay Off Debt Is Worth It

Staying Financially Resilient During Stressful Times

Financial stress can take a toll on mental health, but staying proactive can help you feel more in control. Small, consistent actions can build resilience over time, ensuring you’re prepared for whatever comes your way. Try to avoid impulse spending or borrowing during stressful periods, as these can make your financial situation worse in the long run. Instead, focus on small, consistent actions, like sticking to your budget or setting aside a little money each week. If you’re feeling overwhelmed, seek support from a financial advisor, Credit Counsellor, or mental health professional as needed.

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The Impact of Tariffs on Canadians and What You Can Do to Prepare

Tariffs may be out of your control, but how you respond to their impact on your finances is not. By staying informed, adjusting your budget, and focusing on your long-term goals, you can navigate these challenges with confidence. Whether you’re dealing with rising costs, irregular income, or the fear of a layoff, the key is to act now—so you’re prepared for whatever comes next.

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