The financial health of Canadian households took a big hit this year and worse may be ahead in 2020.

A national survey of financial wellness shows an upsurge in the number of people who are spending more than their income, who can’t pay all their bills on time and who borrowed to pay for daily expenses. The same survey shows that stress levels about money have soared in comparison to the past two years.

The annual Financial Health Index from Seymour Consulting has for the past two years shown significant levels of stress about money at the household level. The worsening in the 2019 numbers stands out for two reasons – because of the magnitude of the deterioration from last year and because it adds some alarming perspective to the recent surge in consumer insolvencies.

A simultaneous rise in both insolvencies and stress about money is hard to ignore because it suggests the heavy spending and debt accumulation of the past decade will not resolve itself gradually and painlessly. The bill may finally be coming due for all that borrowing.

Insolvencies include people declaring bankruptcy and those making consumer proposals, which are a plan to repay some of your debt over time. Insolvencies by individuals increased by 14.5 per cent in the third quarter on a year-over-year basis, and by 19.3 per cent in September alone, according to the Office of the Superintendent of Bankruptcy.

There’s enough going right in the economy to question whether the jump in insolvencies is a statistical blip. Unemployment is low and wage increases are as strong as they’ve been in a while. Also, interest rates remain at extremely low levels.

The declining financial health of some households suggests the insolvency problem will get worse, though. In the latest Financial Health Index, 30 per cent of the 3,010 participants said they spent a little more or much more than their income over the past year, compared with 20 per cent in 2017.

Forty per cent said they have increased borrowing to pay for daily expenses, compared with 34 per cent last year. Sixty-two per cent said they paid all their bills on time, compared with 71 per cent in 2018.

“We’re quite shocked at the differences between 2018 and 2019,” said Eloise Duncan, chief executive of Seymour Consulting. “A lot of people are doing their best, but things are just so much more stretched for them.”

Stress about money has increased dramatically as well. Fifty-three per cent of people agreed that money worries make them lose sleep at night, up from 45 per cent in 2018. Thirty-five per cent said they were in worse financial shape than they were 12 months ago, compared with the 23 per cent who felt they were worse off in 2018.

Do not dismiss financial stress as a problem of lower-income families. In the 2019 Financial Health Index, 37 per cent of people with household incomes of $100,000 said they sometimes, often or very often used a credit card, line of credit or overdraft to buy food or pay expenses. For all income groups, 46 per cent said this.

Sixty-three per cent of people with household incomes of $100,000 and over agreed that money worries cause them emotional stress, compared with 48 per cent in 2018. No other income bracket had a bigger year-over-year jump that high.

Women worry the most about money, the Financial Health Index shows. Fifty-three per cent of women said they feel moderate or high stress about money, compared with 43 per cent of men.

Rising insolvency numbers aren’t the only sign that the worsening financial health of some households is reaching the breaking point. At Credit Canada, a non-profit credit counselling agency, the flow of new clients is up 16 per cent over last year.

“I’m not at all surprised this is happening,” said Laurie Campbell, Credit Canada’s CEO. “There has been a long period of low-interest interests and people borrowing heavily. My opinion is that we’re going to see a year to two years of this.”

The retail frenzy of Black Friday is a week away and then shopping for the holiday season starts. Can we please pause a moment to consider what’s affordable? Next year’s insolvencies are being seeded right now.