In this video interview, Ryan Gubic, a Certified Financial Planner and Founder of MRG Wealth Management in Calgary, discusses the increasing financial stress Canadians are experiencing these days.
Ryan Gubic
PRESS RELEASE
TORONTO, May 23, 2024 /CNW/ – From high grocery and gas prices to elevated inflation and housing costs, Canadians are grappling with money-related stressors that negatively impact their financial well-being. However, the 2024 Financial Stress Index, a national survey of 2,000+ Canadians conducted by Leger on behalf of FP Canada, shows that Canadians are prioritizing their financial health and feeling more hopeful about their financial futures than they did a year ago.
The survey reveals that while Canadians continue to grapple with financial worries, most are embracing strategies to reduce financial stress in the face of persistent economic pressures.
While financial stress is on the rise, so is optimism, and the data speaks volumes: Canadians are recognizing the power of proactive financial management. The most striking revelation? Year-over-year findings continue to show that Canadians who work with a financial professional are less prone to money-related stress, more hopeful about their financial futures, and better positioned to navigate financial uncertainty with confidence.
According to the 2024 Financial Stress Index, money remains the top source of stress for Canadians, with 44 per cent citing it as their primary concern. This number represents a steady increase from 2023 (40%), 2022 (38%) and 2021 (38%). External factors are a key piece of the puzzle, as Canadians cite elevated grocery prices (69%), inflation (60%) and housing-related costs (52%) as leading causes of financial stress. Amid widespread discussions about the impact of these pressing challenges, the data reaffirms the hurdles posed by the current economic environment.
Financial stress continues to affect the mental health of Canadians. Nearly half (49%) have lost sleep over financial worries, and more than half (54%) report negative effects such as anxiety and depression (38%), disruptions in workplace productivity (16%) and strained personal relationships (16%). However, Canadians who work with a financial professional are less likely to lose sleep due to financial stress (42%) than those who do not (52%).
“There’s no denying that persistent affordability concerns can cause significant financial strain, so it’s no surprise that Canadians are continuing to feel the impact of these difficult conditions,” says Meghan MacPherson, a QAFP® professional at Impact Financial Group Inc. “While thoughtful planning and proactive measures can help reduce financial stress caused by economic factors beyond our control, the Financial Stress Index shows that working with a financial professional can help Canadians create a sense of confidence and control in the face of uncertainty.”
Younger generations are experiencing the highest levels of financial stress, with half (50%) of Canadians under the age of 35 citing money as a top stressor, compared to 42 per cent of those over 35. The survey also shows that financial stress weighs more heavily on the minds of younger Canadians, with nearly three-quarters (72%) stating that financial stress has had at least one negative impact on their lives, compared to less than half (48%) of Canadians over the age of 35. This cohort is also more likely (50%) to say they’ve experienced anxiety, depression, and mental health challenges due to financial stress than those over the age of 35 (34%).
Although financial stress disproportionately affects the mental well-being of Canadians aged 18 to 34, 39 per cent recognize the value of creating a financial plan to mitigate stress compared to 22 per cent of those over 35. This trend may reflect a burgeoning curiosity about the advantages of financial planning among younger Canadians.
Data from the latest Financial Stress Index highlights Canadians’ eagerness to take control of their finances. However, navigating the intricacies of personal finances alone can pose challenges.
Findings reveal that Canadians who don’t work with a financial professional are 33 per cent more likely to be stressed about money than those who do, and 23 per cent more likely to have lost sleep about financial worries. In contrast, those who work with a financial professional are more optimistic about their financial futures (56%) than those who don’t (48%). Working with a knowledgeable financial professional, such as a CFP® professional or a QAFP professional, is an important step toward financial well-being.
“A trusted CFP professional or QAFP professional can be a strategic ally, offering personalized solutions tailored to each client’s unique circumstances and aspirations,” says Nabila Mirza, a QAFP professional at Aviso. “Through comprehensive financial planning, our goal is to empower Canadians to make informed choices, optimize their resources, and build financial resilience for a more financially secure future.”
The value of working with a financial professional extends beyond the numbers on paper. By providing expert guidance, financial planners help alleviate the burden of financial worry, even in the face of uncertainty.
Despite the challenging economic climate, a renewed focus on financial self-care is emerging among Canadians. The 2024 Financial Stress Index shows that Canadians are taking charge of their financial well-being, with 91 per cent having taken at least one action to reduce financial stress in the last year. Tracking expenses is the most popular strategy, adopted by 45 per cent of respondents, while debt repayment (38%) and increased saving (33%) also rank high on the priorities list.
The research points to a notable mindset shift with financial well-being at the forefront, as indicated by a growing trend of Canadians prioritizing fiscally responsible decisions when it comes to their expenses. Ranking higher on the upcoming expense list than vacations (19%), nearly one quarter (24%) of Canadians plan on paying off outstanding credit card debt within the next 12 months. That’s compared to 21 per cent in 2023 and 19 per cent in 2022.
“Canadians are adopting a fiscal-responsibility mindset, which is at the heart of financial empowerment and long-term financial stability. It’s a powerful, positive reminder of the value of resilience in the face of adversity,” said Ravi Chhabra, a CFP professional. “While it’s undoubtedly disheartening, we can’t ignore the reality of the current economy and the limitations it places on the financial choices of Canadians. Prioritizing debt repayment while also budgeting for the things that bring us joy will do more than help us lessen immediate financial burdens. It will also lay the groundwork for a future where we can prioritize life’s pleasures without compromising our financial health.”
As Canadians embrace the concept of financial well-being, half (50%) are expressing increased optimism about their financial futures compared to 2023 (47%), despite experiencing higher stress levels. At the forefront of this shift, 55 per cent of Canadians under the age of 35 feel hopeful about their financial futures, signaling a resilient mindset towards financial challenges.
In today’s dynamic financial landscape, the importance of seeking financial support from a professional can’t be overstated. As individuals face the complexities of financial decision-making amidst ever-changing economic conditions, the expertise of a Certified Financial Planner professional or Qualified Associate Financial Planner professional can help Canadians of all ages and stages of life take strides toward greater financial well-being.
Canadians can find a financial planner at Find Your Planner.
The Financial Stress Index is conducted each year for FP Canada by Leger, the largest Canadian-owned market research and analytics company. The 2024 Financial Stress Index was completed between February 28 and March 11, 2024, using Leger’s online panel, receiving 2,040 Canadian respondents nationwide. For comparative purposes, though, a probability sample of 2,040 respondents have a margin of error of ±2.2%, 19 times out of 20.
Established in 1995, FP Canada is a national not-for-profit education, certification and professional oversight organization working in the public interest. FP Canada is dedicated to championing better financial wellness for all Canadians by leading the advancement of professional financial planning in Canada.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list. He was also named by RETHINK to its global list of Top Retail Experts 2024.
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