91% of Canadians took action to reduce financial stress last year, showing a proactive approach
Canadians are facing significant money-related stressors, including high grocery and gas prices, elevated inflation, and rising housing costs.
However, the 2024 Financial Stress Index, a national survey of over 2,000 Canadians conducted by Leger on behalf of FP Canada, indicates a positive shift. Canadians are increasingly prioritizing their financial health and feeling more optimistic about their financial futures compared to last year.
The survey shows that while financial worries persist, many Canadians are adopting strategies to mitigate financial stress amid ongoing economic challenges.
Financial stress is growing, but so is optimism. The data reveals that Canadians are valuing proactive financial management. Notably, those who work with financial professionals experience less financial stress, greater hope for their financial futures, and better resilience in navigating financial uncertainties.
Financial stress on the rise as external pressures persist
The 2024 Financial Stress Index highlights that money remains the top stressor for Canadians, with 44 percent citing it as their primary concern, up from 40 percent in 2023, and 38 percent in both 2022 and 2021.
Key contributors to this stress include high grocery prices (69 percent), inflation (60 percent), and housing costs (52 percent). These economic factors are significant hurdles in the current environment.
Financial stress affects Canadians' mental health, with nearly half (49 percent) losing sleep over financial worries. More than half (54 percent) report negative impacts such as anxiety and depression (38 percent), decreased workplace productivity (16 percent), and strained personal relationships (16 percent).
However, those who work with financial professionals are less likely to lose sleep over financial concerns (42 percent) compared to those who do not (52 percent).
“Persistent affordability issues cause significant financial strain, so it's no surprise Canadians feel these difficult conditions,” says Meghan MacPherson, a Qualified Associate Financial Planner (QAFP) professional at Impact Financial Group Inc.
“Thoughtful planning and proactive measures can help reduce financial stress caused by economic factors beyond our control. The Financial Stress Index shows working with a financial professional can help Canadians create confidence and control amidst uncertainty.”
Impact of financial stress more severe for young adults, interest in financial planning grows
Young adults experience the highest levels of financial stress, with half of Canadians under 35 citing money as a top stressor, compared to 42 percent of those over 35.
Nearly three-quarters (72 percent) of younger Canadians report that financial stress negatively impacts their lives, compared to less than half (48 percent) of those over 35.
Additionally, 50 percent of young adults experience anxiety, depression, and mental health challenges due to financial stress, versus 34 percent of older adults.
Despite the disproportionate impact on mental well-being, 39 percent of Canadians aged 18 to 34 recognize the value of financial planning to mitigate stress, compared to 22 percent of those over 35. This trend suggests a growing interest in financial planning among younger Canadians.
Stress less: The power of professional financial planning support
The Financial Stress Index data shows Canadians are eager to manage their finances better, although navigating personal finances alone can be challenging.
Those without a financial professional are 33 percent more likely to be stressed about money and 23 percent more likely to lose sleep over financial worries.
Conversely, Canadians working with financial professionals feel more optimistic about their financial futures (56 percent) than those who do not (48 percent). Collaborating with a Certified Financial Planner (CFP) or QAFP professional is a significant 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.
“Our goal through comprehensive financial planning is to empower Canadians to make informed choices, optimize resources, and build financial resilience for a secure future.”
Working with financial professionals provides benefits beyond financial metrics. Expert guidance helps alleviate financial worries, even during uncertainty.
Growing optimism as Canadians focus on financial well-being
Despite economic challenges, Canadians are increasingly focusing on financial self-care. The 2024 Financial Stress Index reveals that 91 percent of Canadians took at least one action to reduce financial stress in the past year.
Tracking expenses (45 percent), debt repayment (38 percent), and increased saving (33 percent) are among the top strategies.
Canadians are shifting towards fiscal responsibility, as shown by their priorities. Nearly a quarter (24 percent) plan to pay off credit card debt within the next 12 months, up from 21 percent in 2023 and 19 percent in 2022.
“Adopting a fiscal-responsibility mindset is central to financial empowerment and long-term stability. This resilience is valuable in facing adversity,” said Ravi Chhabra, a CFP professional.
“While the current economy limits financial choices, prioritizing debt repayment and budgeting for joy helps lessen immediate burdens and builds a foundation for future financial health.”
Half of Canadians feel more optimistic about their financial futures than in 2023, with 55 percent of those under 35 expressing hope. This trend indicates a resilient approach to financial challenges.
