If you care about your health, you must tend to your finances
If money stresses you out more than anything else, you’re not alone.
For the fourth time running, the FP Canada™ Financial Stress Index—conducted in 2021, 2020, 2018 and 2014—shows that money is the No. 1 source of stress in Canadians’ lives. Almost eight-in-10 of us—77%—say at least one financial factor causes us stress. The two areas of concern involve saving enough for retirement (35%) and bill payments and expenses (35%).
That’s not to say COVID-19 is an afterthought. In fact, 45% of respondents say the pandemic has directly impacted their financial stress level.
Finances & Health More Intertwined Than Ever
But more than any other year, this year’s Financial Stress Index shows Canadians’ concerns about money are directly impacting their health.
Financial stress has caused more than half (51%) of respondents to lose sleep, and one-in-three (31%) say it’s also led to health issues—that’s up from the 18% who reported money-related health problems last year. Money has also resulted in marriage/relationship problems and family disputes (15% each), distraction at work (14%) and substance abuse or mental health challenges (7%).
“This year’s results show just how important personal financial health is to our overall well-being,” says Al Nagy, a CERTIFIED FINANCIAL PLANNER® professional in Edmonton. “We should all view our finances that way—as a key determinant of our health—and take steps that will give us the best possible outcomes. As we see in this year’s Financial Stress Index, that not only means improved finances, but also personal health, relationships and work life.”
The Impact of Professional Financial Planning
Those of us who work with a professional financial planner report feeling much more positive about our economic well-being, according to the 2021 Financial Stress Index. We’re less likely to say money is our top source of stress (23%) than those who don’t work with a professional financial planner (39%). We’re also twice as likely to say finances don’t cause us any stress (37% vs 19%).
When looking to the future, Canadians who work with a professional financial planner are more likely to say they feel more hopeful about their money situation and financial future than they did a year ago (73% vs. 56%). It’s clear: If you care about your health, you need to tend to your finances. And the impact of professional financial planning extends to personal health. Those who work with a planner are less likely to say they lost sleep because of financial worries (40% compared to 51%) and a third less likely to say that financial stress has led to health issues (20% compared to 31%).
“Knowledge is power—it makes us more confident and better prepares us to handle any challenge that may come our way,” explains Caval Olson-Lepage, a Certified Financial Planner® professional based in Saskatoon. “Professional financial planners help equip you with a better understanding of your finances and create a comprehensive strategy that accounts for your goals and financial obligations, both short and long term. You don’t have to stress about ‘what if?’ because we’ve already answered that question.”
How To Build More Confidence In Your Finances
If you’re among the many Canadians whose finances are causing them stress, here are a few simple ways to start to gain confidence in your financial situation and help alleviate some of that stress:
Prioritize emergency funds over other types of saving. Emergency funds are always critical, and they’re especially important right now as we pull out of the pandemic and are newly mindful that other potential crises could loom on the horizon in the future.
Reduce debt where possible. Make it a priority to pay down highest-interest debt first. Talk to your financial institution about consolidating loans, if possible, and come up with a manageable repayment plan that is aligned with your new household income.
Work with a financial planner. Working with a CFP professional will help you build a plan to help you meet your longer-term goals.
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