Two weeks ahead of what will likely be the next leg up for interest rates comes a warning of how much stress households already feel about money.

Updating its Financial Health Index for 2018, a firm called Seymour Consulting concludes that money-related stress is “omnipresent and mainstream.” In its just-issued 2018 Affordability Index, insolvency expert BDO Canada Ltd. found that 31 per cent of participants said they didn’t have enough money to pay for their basic needs and 52 per cent had just enough to cover living costs.

Didn’t these stressed Canadians get the memo about letting the good times roll? The unemployment rate has plunged since the previous recession and is currently as low as it has been in four decades. Growth in total disposable income has lately come in ahead of inflation. Parents with children have now had a couple of years of the Canada Child Benefit, which offers tax-free payments.

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The Seymour Consulting and BDO surveys suggest that high debt levels, rising living costs and variable incomes from temporary jobs more than offset the improvements in the economy in many households. If people are this stressed now, what happens if interest rates rise later in October and again in the winter?

It’s early to set financial goals for 2019, but how about this for a financial stress reduction plan: Pay down debt. Credit cards first, then loans, then lines of credit, then mortgages. Highest-rate debt first, in other words. A growing economy is more your enemy than your friend if you owe a lot. Higher borrowing costs cancel out pay increases and job security.

Household financial stress may be the most ignored social problem in the country, probably because default rates on loans and mortgages are low. There’s no standardized economic measure of how hard it is to pay your mortgage and other debts every month and meet your other spending obligations. And so, we turn to surveys such as the ones used by Seymour Consulting and BDO for insights on how people are doing from a financial point of view.

It’s important to note that both surveys indicate that the majority of Canadians are doing okay or better. But the stressed minority is alarmingly large.

Seymour Consulting’s Financial Health Index, based on a survey of roughly 5,000 people in May and June, found that money worries kept 45 per cent of people up at night, compared with 42 per cent last year. Thirty-nine per cent said money worries affect their physical well-being, up from 36 per cent.

Seymour’s John Lo said the economic improvements of the past year may not have trickled down to households yet. “But some of the issues that are impacting stress most significantly, especially housing affordability and the cost of living, haven’t improved according to our data.”

Seventy per cent of people said they agreed somewhat or completely that housing affordability is a problem where they live, up from 63 per cent last year. This includes renters as well as people who own houses.

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The BDO Affordability Index, based on a survey of 2,000 people in early July, found that families with children were under the most stress. Over all, 24 per cent of participants said their debt was overwhelming and they don’t know what to do about it. That number rises to 34 per cent for people with children.

There are two levels to the stress that people are feeling – one connected to the problems they’ve having with their day-to-day finances and the other to things they feel they’re neglecting. BDO found that 64 per cent of the people in its survey said they had too little in retirement savings or none at all. Seymour Consulting found that having enough money to retire was the most common worry, along with having money left over at the end of the month to save.

Rising interest rates are going to push stress levels higher, but there’s reason for optimism in the latest debt trends. Growth in the amount of outstanding mortgage debt is at the lowest level since the early 1980s, and monthly car sales in September posted the biggest year-over-year drop since 2009.

Next step: Hammer down the debts you already have. Never mind legalized marijuana. Paying down your debts is the best stress reliever.