Latest Statistics on Financial Stress in Canada
Financial stress is increasingly affecting Canadians. A recent report from FP Canada’s Financial Stress Index reveals that 44% of Canadians cite money as their biggest source of stress, compared to 20% who are stressed about personal health, and 16% who are concerned about work and relationships.
These numbers indicate that financial pressures weigh heavily on many Canadians, and in some cases, this stress can be self-imposed. The silver lining is that 91% of Canadians are actively taking steps to reduce their stress. These efforts include tracking expenses (45%), paying down debt (38%), saving more (33%), and creating budgets (30%).
The Reality of Financial Stress and Its Impact on Mental Health
While younger generations are often more open to discussing money issues, there is a prevailing expectation that financial burdens should ease as we get older, with debt decreasing and income stabilizing. Unfortunately, this is not the reality for many, who may suffer in silence, leading to feelings of disappointment and embarrassment.
Many people find it difficult to cope with the rising costs of living, increasing interest rates, and record levels of debt, which are pushing households to their limits. This financial strain can be exacerbated by the pressure to “keep up with the Joneses,” leaving many feeling ashamed of their situation and reluctant to seek help.
However, by avoiding crucial steps that could improve their finances, people may miss out on opportunities to reduce their stress and enhance their financial well-being.
Top 5 Tips to Overcome Financial Stress: Using the “MONEY” Acronym
To tackle financial stress, I like to use the acronym “MONEY” to explore practical steps for regaining control and creating financial peace of mind.
- M – Monitor Your Money:
Knowing exactly how much money you have coming in and what you are spending it on puts you in control. Create a net worth statement to serve as your financial roadmap. While life throws financial challenges and detours your way, having a plan helps you identify where adjustments are needed and keeps you focused on your goals. - O – Explore Your Financial Options:
Financial flexibility is crucial. If you own a home, you may consider downsizing, taking out a Home Equity Line of Credit (HELOC), or, if you’re over 55, exploring the benefits of a CHIP Reverse Mortgage. You might use all three options at different stages of life. Allowing yourself to explore these options can feel empowering and give you more control over your financial future. - N – Focus on Needs vs. Wants:
Cash flow anxiety can sometimes be temporary. Getting clear on the difference between your needs and wants can help you navigate tough financial periods. By prioritizing your needs, you can ease some of the stress and take control of your spending. - E – Establish an Emergency Fund:
Having a financial safety net provides peace of mind. A financial advisor can help you create an emergency fund, secure access to a line of credit, or apply for a credit card reserved solely for emergencies. You might also consider using your home’s equity for short-term relief. - Y – Say “Yes” to Financial Control:
Taking charge of your financial situation frees you to pursue experiences, opportunities, and challenges that bring balance and meaning to your life. Saying “yes” to financial control reduces stress and allows you to focus on what truly matters.
Feeling like you’ve fallen short financially can be a limiting belief that prevents you from living your best life. Remember, these are your golden years. You don’t need to be asset-rich but cash-poor. With the right approach, you can be both asset and cash-rich, which is truly liberating.
By chip.ca
(used with permission)
