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The Relationship Between Sleep and Money

We’ve all had those days; struggling through work or school after a fitful night’s sleep. The impact of a night of poor sleep is significant – your concentration goes out the window and your temper can flare as minor stresses and annoyances seem inflated in size.

Poor sleep can cause stress, and stress can, in turn, lead to a poor night’s sleep. You toss, you turn, you worry, you wake up every few hours, and you begin the vicious cycle again. On the surface, buying a new mattress or setting aside more time for sleep seems costly, but not doing so has a surprising cost as well.

Lack of sleep lowers your productivity and impacts your mood – but it gets even worse. Did you know that sleep (specifically the lack of it) can even impact your finances?

A 2016 study by Jeffrey Shrader of the University of California and Matthew Gibson of Williams College found that people who increased their sleep by one hour per night saw an uptick in their wages by 5%.

This makes robbing yourself of sleep take on a whole new meaning. Your sleeplessness may be hurting not just your mood, but also your wallet. Shrader and Gibson weren’t the only ones who found a connection between sleep and income.

Joan Costa-Font, a health economist, noticed a drop in his own sleep – and productivity – after his first child was born. Together with labour economist Sarah Flèche, he set out to quantify exactly how much sleep disruption affects productivity and income earned. The results were significant.

“We find that improving the mother’s average nightly sleep duration by one hour increases employment by four percentage points, the number of hours worked by seven per cent, household income by 10-11 per cent and job satisfaction by 0.01 points,” the economists wrote in a paper published by the London School of Economics Centre for Economic Performance.

Numbers like that are definitely concerning to us. At, we help Canadians make smarter decisions with their money, helping them with information on how to get a mortgage,  the best credit cards in Canada, savings account interest rates, and more.

Reading these studies, we learned a few things, and we realized that Canadians might not understand the importance of proper sleep and how it impacts their finances. In addition, some people just don’t appreciate sleep due to the quality of their mattress.

This doesn’t need to be the case.

We live in a bit of a golden age when it comes to mattress shopping. Mattress buying used to be fairly complex, but now you can buy a mattress online if you choose to do so, and it will arrive at your door. Combined with a long satisfaction guarantee, you can confidently and conveniently replace your old mattress. However, for many people the cost of a new mattress is still an intimidating barrier.

Based on the connection between sleep and income, it seems that a quality mattress is not just an investment in our personal health but also an investment in our financial health as well.

However, we’re not telling you to go out and shop immediately. We also advocate responsible spending.

For any major purchases, such as a mattress, a new TV, any home appliance or expensive trips the most financially responsible strategy is to pay cash. If you budget for the purchase over a longer term, saving money each week or month, you can accumulate the funds you need without going into debt.

This strategy can make use of short-term GICs – which offer guaranteed investments for typical terms ranging from six months to five years. Using GICs can make sense for short- to long-term savings goals when you’ve got an idea of when you will need to access the funds and no tolerance for investment risk (they are guaranteed after all)

Another route that might make sense is a high interest savings account. The best savings account rate in Canada is currently 2.3%. So, if you were to put $5,000 in that high interest account, you would earn $150 in interest in the first year. That’s not a bad start – earning interest is certainly easier than paying it.

Don’t worry if you don’t have a lump sum to get your savings started. These tactics are still useful because your funds can easily be accessed and transferred as needed.

Finally, another avenue for purchasing big ticket items is interest-free payment plans – and some of the mattress companies offer these to make the purchase process easier. For example, Endy offers PayBright – an interest-free payment plan that requires $0 down. If consumers are able to pay off the payment plan loan within the allotted time frame it’s one alternative to saving up prior to purchase, since you won’t be required to take on any additional debt and are able to get a better night’s sleep sooner.

So, those are three options to consider if you decide to invest in a better night’s sleep. If you plan it out right, you might be able to fall asleep counting dollars instead of sheep.

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Photo by BRUNO CERVERA on Unsplash