As many of us know, financial stress can impact many areas of our lives. According to the latest chapter of the Financial Stress Index, by FP Canada™ (view survey results here) the worse the financial shape we are in the more likely we are to have severe stress-related issues in our lives. The study found that taking on more debt caused higher stress levels, worsened sleeping patterns, accounted for weight gain, and caused a general decrease in physical activity all of which can lead to greater and more severe health problems.
Consistent with previous years, in 2020 money is the number one cause of stress for Canadians by a large margin. Money (38%) outranks personal health (25%), work (21%) and relationships (16%) as the top source of stress in Canadians’ lives. This is particularly significant given the multitude of non-financial stresses related to the COVID-19 global pandemic.
The 2020 Financial Stress Index also reveals that as Canadians age, they feel less stressed about money – with 44% of 18-to-34-year-olds listing money as their leading concern compared to one-in-four (25%) of those aged 65+. Hopefully, this is because by the time Canadian’s have reached retirement age, they have done a good job saving and can enjoy the benefits of their hard work and sacrifices and not because they have stopped caring.
What You Need to Know
When you are in significant debt or behind on your bills it can feel like a never-ending nightmare. Living your life with these stressors can have severe effects on both your physical and mental health and therefore should be a top priority. With various studies over the last few years showing that close to half of all Canadians are living paycheque to paycheque, tackling financial issues can sound daunting, but it is the only way to start making meaningful change. Creating a plan, cutting back spending, and paying down your debt will not only put you in a better place financially but physically, as well.
Make a plan and stick to it. You might be surprised how having some control over your finances can put you at ease.
Sometimes, however, life happens. Situations present themselves that are beyond our control. Unfortunately, our finances are usually the first to take a hit when this happens. We may not be able to predict when an illness, death, job loss, or unforeseen expenses will occur, but we can start planning for when it happens. Working towards an emergency fund is a great place to start. It is generally recommended that a family have six months of salary saved up in case of an emergency. While this may not be a realistic short-term goal for everyone, starting with any amount is better than nothing.
Another safeguard to put in place is a good insurance plan. Critical Illness, Disability, Life, and Long-Term Care insurance are all designed to eliminate the financial stress that comes with a family health emergency. All these strategies can allow you to focus on what matters most to you, while still allowing you to remain financially stable.
The Bottom Line
There is no denying that financial stress can make a serious impact on our physical and mental wellbeing. If you are setting goals to improve your health, it might make sense to start with your finances. While we can’t always control what our bodies will do, we can gain control of our money and make the best choices possible. Don’t be afraid to ask for help. FP Canada found that Canadians with a comprehensive wealth plan in place reported greater levels of financial and emotional well-being. Meeting with a wealth planner helped people overcome financial stress and regain control over their future finances.