The costs of  financial stress

At times, all of us feel some emotional or mental pressure when coping with life's challenges. Not all stress is bad, however. Some kinds of stress can be motivating. For example, if we're starting a new job and need to learn new ways of working, the added stress can fire us up to meet the challenge.

On the other hand, there are other kinds of stress, like financial stress, that have harmful effects on our work, health, and personal relationships. Not everyone experiences stress the same way. As the Manulife Canada Retirement Study: Stress, Finances, Well-being1 found, some groups are more vulnerable than others.

The pandemic was a dramatic shock. In a short period of time, it completely changed how we live, work, and spend. Our study showed the pandemic increased stress and financial stress among all Canadians with close to half saying it has had a negative impact on their mental health. Yet the most at-risk groups for financial stress are women, younger Canadians under age 36, and those with household investable assets below $100,000.1 Individuals in these groups were more likely to say financial concerns added stress to their lives and they could save more for retirement if they could better manage their financial priorities.1

Women and financial stress

"Nearly three in ten women say they are more worried about basic expenses like food, transportation, and taxes." 1

Compared to men, women were disproportionately affected by pandemic business and school closures. Since women are frequently employed in service industries, including hospitality (hotels, restaurants), personal services (healthcare, grooming), and other public facing jobs which bore the brunt of pandemic lockdowns, many lost their jobs, at least temporarily. Those with primary responsibility for school-age children and other family members were forced to step away from paid work to assume these urgent caretaking duties.

Based on our survey, the key financial concerns among women include:

  • Debt: Only 36% of women are comfortable with the amount vs. 46% of men1
  • Retirement readiness: Women are less likely than men to know whether they're on track for retirement and what their retirement income would be1
  • Investing: Women say they are less confident in the selection and management of their investments than men1

Younger Canadians are less financially secure

"Three in ten were more likely to say they worry about having financial difficulties a great deal."1

Younger Canadians tend to work in service industry jobs, like restaurants/bars and retail where pandemic lockdowns dramatically affected their ability to earn an income. Since they've not been in the workforce long, younger Canadians have a lower level of household assets, making them even more vulnerable to financial stress. According to the survey, younger Canadians, those with lower household investable assets, and women all reported being extremely stressed and financially stressed related to the pandemic.1

How to reduce financial stress

Having a financial plan makes a positive difference in feeling confident. Among those surveyed in the Manulife Canada Retirement Study, a majority of those with a financial plan (67%) reported that their financial situation was excellent or very good.1 Being able to connect with a trusted advisor to get the support and information we need is key to reducing financial stress. 

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