Personal Finance

How do Canadians feel about financial stress

”The truth is that stress doesn’t come from your boss, your kids, your spouse, traffic jams, health challenges or other circumstances. It comes from your thoughts about your circumstances.” – Andrew Bernstein

It’s well known that money is a source of stress. Financial stress is widely cited as a top reason for divorce and as a major cause of arguments for those in relationships. In last week’s post, I mentioned that, in a national study conducted for the Financial Planning Standards Council (FPSC), 42% of Canadians stated that money was their greatest stress. It was the highest-ranked stressor in the survey, significantly outranking work (23%), personal health (19%) and relationships (17%).

Related article: 7 causes of financial stress

I’m a bit of a nerd when it comes to studies and research, especially when the research centers on anything connected to psychology and behavior, so I was interested to see what else the study had found and I thought I would share some of the findings in this week’s post:

Women vs. men

Interestingly (but perhaps not surprisingly), women reported higher levels of financial stress than men. 51% of women said that worry about money caused them to lose sleep (compared to 40% of men); 30% reported feeling anxiety and 9% said they felt overwhelming levels of financial stress (compared to 17% and 3% respectively for men).

Related article: Women and Money

Many studies have found that women tend to be more concerned about money than men. Money and finance are areas that many women feel insecure about and intimidated by. Some of this could be attributed to the fact that, historically, household finance was considered to be something that men should take care of and so many women weren’t raised with a solid understanding of money or money management. As times have changed, and especially with more women reporting taking on the role of a primary money manager in the household, women have found themselves increasingly responsible for money and this has created stress for many. Additionally, women are earning more and living longer than previous generations, leaving them with increased financial responsibility over a longer period of time.

Money regrets

13% of the people surveyed said they had no regrets about their past financial decisions but, for the other 87%, there were a number of things that they wished they had done differently:

  • 15% said they wished that they had started saving money or started saving earlier
  • 10% wished they had invested more/earlier/wiser
  • 6% thought they should have spent less
  • 5% regretted not having taken either a better job or a better paying job
  • 5% said they wished they had bought a house/condo/property
  • 5% regretted not getting a better education

One of the challenges of money management (and life in general) is that our best lessons often come with the benefit of hindsight. Unfortunately, when it comes to money, time is our biggest asset and the later we learn the importance of saving and understand the power of compound interest, the less opportunity we have to put what we’ve learned into practice. Having said that though, I truly believe that it’s never too late to take action and that something saved is far better than nothing – we can’t do anything to change our past but we can always do something to change our future.

Related article: Implementing your financial goals

Honesty about personal finances

Another interesting fact noted by the surveyors was that millennials (those born in the ’80s and ’90s) were much less honest about their personal financial situation than the national average. 33% of millennials reported lying to their friends about their financial situation, compared to the national average of 17%. 25% of millennials said they had lied to family members about finances and 15% said they had lied to co-workers (compared to a national average of 14% and 9% respectively).

When it comes to money, I think the main reasons that people lie are because they’re embarrassed, afraid or in denial. Millennials have been raised in an era dominated by the rapid growth of electronic transactions, easy access to credit and a desire for instant gratification and they often carry significant amounts of student and consumer debt. With very little being taught in schools about personal finance and how to manage money and credit, and a society that puts increasing emphasis on the need to acquire “stuff”, it’s hardly surprising that so many of them feel the need to lie about their personal finances in order to keep up with other people who are also lying about their finances.

Shared finances

61% of Canadians surveyed reported that they were in a relationship with shared finances. When they were asked how transparent they were with their partner about finances and how often they argued about money, an interesting correlation occurred. 58% of the couples who were most transparent about money reported rarely or never arguing about money, compared to only 30% of those couples that said they were not transparent about their finances. With money is cited as one of the most common causes of arguments in relationships and financial incompatibility being a leading factor in divorce, it’s not surprising that couples who talked openly about money and finance, and who kept no financial secrets from each other, would have fewer money-related arguments than those who took a more individual or secretive approach to their finances. While transparency about money isn’t always easy (especially for millennials!) if it cuts down on arguments, stress, and conflict, then it might be worth considering as a key part of the recipe for relationship success.

Related article: Couples need to talk about money

I found this study interesting and it inevitably led me to think about how I would have answered the questions if they’d been posed to me and how my friends, family or clients might have answered. However, there’s a part of me that wonders if, rather than constantly pointing out how stressful money can be, we should focus instead on how to conquer and reduce that financial stress. Rather than just making it a talking point, perhaps it’s time to actually take some definite action towards helping people (especially young people) feel more confident and comfortable with money and equipping them with the skills and knowledge to handle it effectively? What do you think?


  1. Claude Mayrand

    How do Canadians feel about financial stress

    There are two kinds of money: assets that have a paper value and cash that can be allocated to necessities, investments, food, pension plan, etc.

    If there’s a shortage of disposable cash, stress thrives.

    Paper value assets can fluctuate and can also cause stress when, for instance, the bank wants extra cash to pay down a mortgage that is too high because the paper value of the house has diminished. Stress thrives because there’s not enough cash.

    When there’s not enough cash, some will abuse credit cards that charge between 20 and 30 percent when they can’t be repaid. Stress thrives because there’s not enough cash.

  2. Karthigan Srinivasan

    This is a great article that is exposing a classic problem in every society. I would like to further emphasize the importance of honesty. I will quote Shakespeare – “To thine own self be true”.

    Several years back, I was in deep debt and I didn’t even want to look at how much I owed. One day, I finally decided to face it. I listed every single credit card debt of mine down. I was honest to myself and I admitted I had a serious issue and I clearly quantified it.

    It was overwhelming. Then I put together an action plan. I froze spending on credit cards. I started by saving and paying off the card I owed the least amount of money on. This small victory gave me the morale boost to tackle the bigger debts one debt at at time.

    Over a three year period, I dug myself out of the mess completely. Yes, it was a challenging time. However, it was well worth it.

    It all begins with being honest to yourself and then holding yourself accountable.

  3. Patricia Gass

    Excellent summary and especially love your conclusion.

    It’s hard to take action but even small steps (saving more, spending less etc) can make a difference and provide momentum/motivation to make bigger improvements.

    We are all human and make mistakes with money (financial professionals included). The key is to recognize/admit it and adjust our behaviour.

    Great article to kick-off financial literacy month in Canada next month.

    • Claude Mayrand

      Patricia, I just want to emphasize that reacting to, rather than wallowing in one’s financial woes in critically important.

      When “cooking”, if we burn the toast ☺ we start over or we don’t eat.

      • Patricia Gass

        Completely agree!

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