(Special) – Canada is a pretty affluent country compared to a lot of the world but some recent studies show many Canadians are facing financial hardships in their personal lives, are stressed out about their finances and feel pessimistic about their financial futures and those of their children.
According to an Angus Reid survey, 31 per cent of Canadians say they feel “very stressed about money” on a regular basis, either often or all the time. More than half believe poverty has been increasing where they live in recent years, 30 per cent are pessimistic about their personal financial situation and more Canadians (43 per cent) believe their children’s generation will be worse off than themselves compared to those (32 per cent) who believe they will be better off.
The study showed that 16 per cent of the population is struggling financially, 11 per cent are on the edge, 36 per cent are recently comfortable and 37 per cent are always comfortable. Those in the struggling category are facing financial challenges that are negatively affecting their quality of life. Between the struggling and on-the-edge groups, 27 per cent could be described as experiencing notable financial hardship today.
In a similar vein, a recent TD bank survey found that only 29 per cent of Canadians feel confident they will be able to keep pace with change over the next 10 years while the majority of those surveyed were less certain.
More than two thirds of Canadians noted that financial security is most important to their personal level of happiness and quality of life today. Almost half noted that financial security concerns them the most when it comes to negatively impacting their quality of life.
Rina DeGrazia, vice president of financial education with TD bank, believes the financial angst being experienced by a significant number of Canadians can be attributed to, among other factors, the high costs of housing and raising children, and to income volatility being caused by mechanization and the changing nature of work.
“One in five Canadians are struggling financially,” DeGrazia said in an interview. “The economy is changing. Technology is reducing employment and more and more people are self-employed or working part-time, sometimes at several jobs. Some 40 per cent of people are experiencing moderate to high income volatility and 18 per cent of Canadians’ monthly income can change up to 25 per cent or more a month. People with income volatility tend to be more pessimistic.”
DeGrazia says Canadians need to acknowledge the changing world of work, increase their level of financial literacy and learn how to better manage their finances. This includes a broad range of financial and lifestyles issues such as managing and reducing debt and learning the differences between good and bad debt, understanding the difference between needs and wants, having a budget and learning to live within your means.
“With today’s increasing housing costs it’s very easy for people to feel they have to get into the market before it’s too late and take on too much for them to carry,” she says. “Debt is a negative driver and can easily put people on the edge.”
DeGrazia says building up an emergency fund and saving for retirement are good financial habits that people should practice and make part of their budget and financial plan. Many financial advisers recommend people set aside three months or more of money to cover essential expenses in a special account in the event of an emergency such as loss of income.
As part of the bank’s commitment to financial literacy it recently launched The Ready Commitment program to help people commit themselves to be more prosperous that includes an education program to help people build financial skills and improve their financial confidence.
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.
Copyright 2018 Talbot Boggs
Talbot Boggs , The Canadian Press
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