We know Canadians are stressed about money because endless polls keep telling us so.
Money stress isn’t just a recent phenomenon – I wrote a story in March, 2019, about why people were feeling so anxious about their finances despite reasonably good economic conditions. But high inflation and expensive borrowing costs have certainly made people feel worse about their finances.
You can see this clearly in some recent data provided by the Financial Resilience Institute, a non-profit group that specializes in measuring financial well-being. For the first time since it began surveying people in 2017, the FRI found more anxiety about money than loneliness.
FRI surveys look at six aspects of well-being – financial, emotional/mental health, physical, work satisfaction, relationships with family and feelings of connection with neighbours and community, which is a way of measuring loneliness.
In June, 2024, 38 per cent of people said they had good to excellent levels of financial well-being and 39 per cent said they felt good or better about their connections to others. Previously, loneliness was a bigger problem than money.
For context, 70 per cent felt good or excellent about family relationships, and 51 per cent felt similarly about emotional well-being. Roughly 47 per cent felt good or better about both physical well-being and work satisfaction.
Loneliness has been described as an epidemic that can negatively affect both mental and physical health. The problem is severe enough that the World Health Organization has commissioned a three-year study aimed at finding ways to build social connections.
We know much less about the effects of money stress, but at least there’s help available. Non-profit credit counselling agencies work with people in deep debt. Check your workplace benefits as well – some employers have introduced programs in recent years to help indebted or stressed employees.
With inflation easing and interest rates coming down, the financial burden on Canadian households will ease at least a little in the year ahead. Money stress will persist, though. We need to think about coping with it, not waiting for it to disappear.
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Rob’s personal finance reading list
A trio of no-fee credit cards that stand out for producing cashback rewards, which are particularly attractive in today’s high-cost world.
The toilet paper will always get through
There’s panic buying of toilet paper in U.S. cities as a result of a strike at major ports. Sound familiar? A similar shortage occurred in the early stages of the pandemic, then eased when it when people realized there was enough for everyone. Repeat after me – the toilet paper will always get through.
Not all sunshine with solar panels
Property insurance companies have issues covering homes equipped with solar panels. If you plan any sort of a clean energy upgrade of your home, run it by your insurer first or run the risk of having your policy cancelled.
One of the key rules of frugal living is to drive a used car and never buy new. I’ve owned both and way prefer new, but never mind that. Here’s a list of things to look out in evaluating a used vehicle.
Podcast fans
Subscribe to Stress Test on Apple podcasts or Spotify.
Ask Rob
Q: Which bank/credit union offers the best rate for a six month or one year deposit?
A: My go-to resource for rates on deposits is HighInterestSavings.ca – savings accounts, GICs and a forum where people discuss the best deposit options.
Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
Tools and guides
A thorough tutorial on how to save for a home down payment. A credit counsellor wrote this, not someone who sells mortgages or homes.
In the social sphere
Social media: An amusing X thread on expenses that blow up financial plans.
Watch: Index investing versus Warren Buffett
Money-Free Zone: I cannot get much traction on the album released earlier this year by Kim Gordon, a pillar of the now defunct alt rock band Sonic Youth. Nothing on The Collective matches a pounding yet mesmerizing cut from 1997 called Never Gonna Sleep. It’s from an album by a group Gordon co-led called Free Kitten. From the ‘Youth days, check out Gordon’s vocals on the blistering Tunic (Song For Karen).
More PF from The Globe
- Desjardins’ chief economist on recession risks, rate cuts to come, and why five-year fixed mortgage rates are about as good as they’ll get
- The pros and cons of retired grandparents moving closer to their families
- Here are the most common mistakes lawyers see in wills – and how to avoid them
- BlackRock’s Rick Rieder says this is a ‘golden age of fixed income’
