Why Affordability Is Canada’s Biggest Financial Problem — And How Households Can Adapt
Marco Liberatore - Dec 01, 2025
Affordability has become the biggest financial concern for Canadians going into 2025. Rising shelter costs, elevated interest rates, and higher daily expenses are putting significant pressure on household finances. For many Canadians, most of their i
Why Affordability Is Canada’s Biggest Financial Problem — And How Households Can Adapt
Why Canadians Are Feeling Financially Squeezed Right Now
Affordability has become the biggest financial concern for Canadians going into 2025. Rising shelter costs, elevated interest rates, and higher daily expenses are putting significant pressure on household finances. For many Canadians, most of their income is already committed before the month even begins.
- More money is going toward:
- Rent or mortgage payments
- Groceries and essentials
- Utilities and insurance
- Transportation
- Family and childcare costs
This leaves less capital available for savings and long-term investing.
How Rising Rates Have Changed the Household Budge
Even as inflation moderates, interest rates remain elevated. This means:
- higher mortgage payments
- costlier debt
- tighter cash flow
- reduced discretionary income
Household balance sheets have shifted dramatically in just two years.
Why Affordability Matters for Long-Term Wealth
When Canadians feel stretched financially, it affects every part of their financial life, including:
- retirement savings
- investment contributions
- emergency reserves
- portfolio discipline
- long-term wealth accumulation
Even short interruptions in investing can meaningfully impact long-term outcomes.
How Canadians Can Regain Control
- Review cash flow realistically: Build a plan based on today’s numbers, not last year’s.
- Build a liquidity buffer: This protects against unexpected shocks.
- Prioritize key financial goals: You can’t prioritize everything equally.
- Revisit investment structure: The rate environment has changed — portfolios should too.
- Remove unnecessary financial risk: Especially in over-concentrated asset areas.
How Working With an Advisor Can Help
During periods of financial pressure, an advisor can help Canadians:
- create structure and clarity
- protect long-term goals
- reduce financial stress
- stay disciplined amid uncertainty
- build a practical recovery plan
These moments are when guidance matters most.
Final Word
Affordability challenges are real — but they can be navigated with the right strategy and planning.
If affordability pressure is affecting your ability to save or invest, reach out. I can help you build a practical, personalized financial plan to stay on track toward your long-term goals.