The rising costs of housing, groceries, gas and other goods and services are weighing heavily on the minds and budgets of Canadians, causing growing concerns about their long-term financial well-being.

The findings of the 2022 FP Canada Financial Stress Index, a survey of 2,001 Canadians conducted by Leger on behalf of FP Canada, shows that for the fifth time in eight years, Canadians say money is their top source of stress (38%), ranking it significantly higher than personal health (21%), work (19%) and relationships (18%). One in three Canadians (35%) say financial stress has led to anxiety, depression or mental health challenges, with Canadians between the ages of 18 and 34 (45%) substantially more likely than Canadians 35 and up (31%) to say financial stress is having a negative impact on their mental health.

The results suggest that the rising cost of nearly all aspects of daily living due to record inflation is taking its toll on the average Canadian. The majority of respondents (58%, up from 45% in 2021) say the pandemic has had an impact on their financial stress levels while nearly two in five (39%, up from 29% in 2021) say they feel less hopeful about their financial future than they did a year ago.

Nonetheless, many are taking action to get a handle on their finances. More than they did last year, respondents say they’re tracking their expenses (44% compared to 34% in 2021) and more than a third (37%, up from 34% from last year) also say they’ve saved more money.

“It’s encouraging to see more Canadians taking steps to alleviate financial stress, but the 2022 FP Canada Financial Stress Index shows there are still very real underlying concerns about personal finances right now,” says Tashia Batstone, President and CEO, FP Canada. “As a profession, it’s clear we have to work hard to ensure all Canadians feel they can handle today’s economic challenges and help them become more optimistic about their long-term financial outlooks.”

Rising cost of living is having a significant impact on financial stress

Inflation, high prices at the pumps and rising housing costs, including climbing mortgage and interest rates, are all weighing heavily on the average Canadian, but it’s the increased expense of groceries that is being felt most acutely across the board. Nearly seven in 10 (68%) Canadians (and more than three-quarters of Atlantic Canadians) say rising grocery prices are having a direct impact on their financial stress levels.

Rising gas prices (56%), inflation’s impact on the cost of goods and services (55%), climbing house prices (25%), interest rates (25%) and rental costs (23%) are also significantly affecting stress levels. Younger Canadians between the ages of 18 and 34 (45%) and racialized Canadians (35%), in particular, cite rising house prices as being a major financial stressor. Overall, only one in five (20%) say they have more disposable income this year than they did a year ago, while two in five (39%) say they have less.

“There’s no way around it — the combination of the prolonged pandemic, record-setting inflation and the growing cost of everything from a mortgage to a bag of milk is stressing Canadians out,” says Kelly Ho, CERTIFIED FINANCIAL PLANNER^® and Partner with DLD Financial Group Ltd. in Vancouver, BC. “While tracking expenses or creating a budget or financial plan won’t help bring down the prices at the pumps or produce stands, those efforts can have a significant positive impact on alleviating financial stress and helping the average Canadian stretch their dollars.”

Professional planning support can go a long way to easing financial stress

The results of the 2022 FP Canada Financial Stress Index show that working with a CERTIFIED FINANCIAL PLANNER professional or QUALIFIED ASSOCIATE FINANCIAL PLANNER™ professional can greatly improve financial outlooks for all Canadians.

Those who work with a CFP^® professional or a QAFP™ professional were less than half as likely to cite money as their top source of stress (15%) than those who don’t (39%) and even those who work with other financial professionals (32%). Canadians who don’t work with a CFP professional or QAFP professional were significantly more likely to say they’ve lost sleep because of financial worries than those who do (44% compared to 26%) and that their financial stress has led to anxiety, depression or mental health challenges (36% compared to only 16% for those that work with a CFP professional or QAFP professional).

Canadians who work with a CFP professional or QAFP professional, compared to those who don’t, were also significantly more likely to say that:

• The COVID-19 pandemic has had no impact on their financial stress levels (61% vs. 39%); and
• They are more hopeful about their financial future this year than a year ago (55% vs. 48%).

“The positive effects of working with a professional financial planner are clear — and extend beyond just dollars and cents,” says Russell Sawatsky, QUALIFIED ASSOCIATE FINANCIAL PLANNER at Money Architect Financial Planning in London, Ont. “The average Canadian needs expert help now more than ever to keep their finances under control, help them gain confidence about their money and ensure they can have a positive outlook about their short- and long-term financial well-being.”

To find out more about the 2022 FP Canada Financial Stress Index read the white paper and the full results of the survey.

Read the full article: fpcanada.ca 
Published June 7, 2022