Helping Canadians deal with pandemic-driven financial stress

New survey lifts lid on sources of financial worries among Canadians, BMO tells WP

Helping Canadians deal with pandemic-driven financial stress

Since 1992, the world has observed April as Stress Awareness Month, a time to raise awareness about the epidemic of stress throughout the modern world. Nearly two decades later, the hanging threat of COVID-19 is compounding that risk among everyday Canadians.

In its recently conducted Real Financial Progress Index survey, BMO saw hints that Canadians are well on the way to recovering from the unanticipated impact of COVID-19 last year. Around two fifths (39%) of respondents said they are feeling more secure today compared to a year ago, and three-quarters (76%) are feeling optimistic about their financial future for the next year.

Still, there are causes for concern. “We did confirm that Canadians are still experiencing financial anxiety, and it can be brought on by a magnitude of factors,” said Gayle Ramsay, head of Everyday Banking and Customer Growth at BMO. “Not surprisingly, COVID-19 emerged as an all-encompassing issue, whether it’s the thought of lockdowns or having someone you know be unwell.”

Among the sources of Canadians’ financial anxiety revealed by the index, COVID-19 emerged as the leading concern shared by 55% of respondents. Around two fifths of respondents also cited worries from fear of unexpected expenses (43%) or their overall financial situation (39%).

Other sources of financial anxiety unearthed by the survey were housing costs (35%), family-related expenses (26%), keeping up with monthly bills (26%), credit card debt (23%), medical expenses (22%), and student debt (13%).

“Everyone's situation, and how they show it or react to financial stress is unique,” Ramsay said. “Certainly, some common behaviours are things like losing sleep, lack of focus, unable to carry on normal tasks, and maybe avoiding talking about your finances.”

While the figures didn’t reveal significant regional differences, Ramsay said there were disparities between age groups. Millennials and Gen Z respondents were feeling more positive with respect to their financial security, whereas those over 65 expressed more worries – understandably so, as they face more risks associated with retirement.

“Canadians and their families are facing situations of economic, political and personal uncertainty,” she said. “Financial planning remains as a relevant as ever, in terms of helping them move through and manage their financial stress.”

As Ramsay pointed out, many factors naturally fall outside of people’s control, and weathering difficult times means focusing on what’s in their hands. That doesn’t come naturally or easily for the majority of Canadians under stress, which is why they’d need a financial professional in their corner. With that in mind, BMO offers its support with financial planners to help people make real financial progress, regardless of what their financial picture may look like.

“One way financial planners can help clients is to make sure they’re re-evaluating their budgets, to see if there are opportunities for them to cut costs,” Ramsay said. “They can also help make sure clients have actually checked the state of their debt: are they carrying more debt than they should, or do they have a plan to actually become debt-free?”

Healthy financial habits and practices, she added, can help reduce clients’ anxiety in the long run. Having an annual financial health checkup with a planner, for example, can help them get a better sense of their financial situation and whether they’re making progress. The discipline to look at credit reports and building up savings and emergency funds, she added, are other things planners can help with.

“I think that having the financial plan allows you to actually have that view things are not as bad as they seem,” Ramsay said. “When you have a view what your finances are, and when you have a plan about how you actually make real financial progress, you’ll have a better sense of what is within your control.”

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