Bills, lack of savings stressing Atlantic Canadians

Survey puts region among the most worried in Canada over financial issues from retirement to paying the mortgage

Stoically struggling to pay the bills, cover the rent, and squirrel away enough money to retire, Atlantic Canadians are among the most worried people in the country when it comes to financial matters.

“A lot of Atlantic Canadians say the cost of living has gone up and they’re having trouble making ends meet,” said Eloise Duncan, principal of Vancouver-based Seymour Management Consulting, in an interview.

In a study of the financial health of Canadians released in November, Duncan and her Financial Health Index cofounder John Lo paint a stark picture of the pervasiveness of financial troubles. Nowhere in Canada is that situation as bad as in some of the Atlantic Canadian provinces.

In New Brunswick, a whopping 50 per cent of the respondents to this year’s Financial Health Index stated they were stressed over ongoing and future financial obligations. That compares to the national average of 43 per cent. People in that province are also much less confident in their ability to get through financial hardships, with only 39 per cent expressing confidence in those abilities compared to 45 per cent of Canadians. And New Brunswickers are also among the least satisfied of all Canadians with their financial situation.

On The Rock, things are bit better than in New Brunswick – but not much. The study showed 48 per cent of Newfoundlanders feel stressed by their financial situation and only 43 per cent felt confident in their ability to handle it. A scant 40 per cent said they were happy with their current financial situation.

There are, thankfully, bright spots.

Nova Scotians are among the most satisfied of all Canadians with their personal financial situations. Half of all Bluenosers reported being happy with their financial situation, higher than the Canadian national average of 45 per cent, and only 39 per cent of Nova Scotians and Islanders said they felt stressed by money worries.

Nova Scotians are also more confident about their abilities to handle financial troubles, with 48 per cent of them expressing such confidence compared to only 45 per cent in the rest of Canada.

On Prince Edward Island, people worried less about their finances but were also less confident in their abilities to handle financial crisis when they occur than in the rest of Canada.

“It seemed to be attributable to macroeconomic factors, the resource sector or infrastructure sector, and what is happening there,” said Lo.

Atlantic Canadians are generally split down the middle on whether or not things are better this year, financial speaking, than they were last year. Although 29 per cent reported being worse off now, 28 per cent said they’re better off.

More troubling is that almost one out of five Atlantic Canadians, the highest percentage in Canada, has no idea how they would get extra money should an emergency arise. When asked how they would come up with money for some unexpected need in the coming month, 19 per cent of Atlantic Canadians said they didn’t know how they would cope. That compares to an average of 14 per cent across the rest of Canada and only 11 per cent for respondents in Alberta.

In that prairie province, folks were three times more likely to say they would deal with an unexpected financial need by getting a payday loan than in Atlantic Canada. Here, the most often-given solution was to go to a credit union or bank and ask for a loan.

Despite their worries, though, Atlantic Canadians remain steadfastly independent – perhaps too much so - when it comes to money.

Almost half of Atlantic Canadians, 46 per cent, said they don’t discuss their financial matters with anyone, making them the least likely in the entire country to talk about their personal finances with anyone. And that includes family members.

Only 15 per cent of Atlantic Canadians said they would discuss their finances with friends or family. In the rest of the country, one in four Canadians would let friends and family in on their personal financial situation.

“People (in Atlantic Canada) are way less likely to share their money worries and less likely to turn to family and friends for support,” said Duncan. “People are more private in these small towns.”

The only people even more guarded than Atlantic Canadians are those living in rural areas. In farm country, 49 per cent of Canadians said they don’t talk about financial matters with anyone.

The things that keep Atlantic Canadians up at night worrying about money are much the same and figure roughly as prominently for them as they do for other Canadians: having enough money for retirement; being able to put aside a bit in a savings account at the end of each month; and building up a financial cushion for unexpected expenses.

With relatively affordable housing in this region compared to some of country’s major cities, Atlantic Canadians are a bit less likely to be worried about being able to buy a house. But they complain about housing being too expensive as much as other Canadians and worry more even more than the national average about making their mortgage payments once they’ve actually bought a house or condo.

The Financial Health Index surveyed 5,200 adults across the country, including 834 Atlantic Canadians, for its second annual report and revealed significant age and gender-based differences in Canadians’ propensity to worry about money. Women, it seems, worry more – a lot more – than men in Canada about their financial situation. Money worries caused 53 per cent of the female respondents extreme emotional stress but had that effect only 41 per cent of the men. Or so they said.

Although the researchers did not delve into the causes of that stress, Lo suggested it might tied to gender roles and expectations.

“Women tend to be … influenced by how they were brought up in terms of money,” he said. “They’re less confident in their ability to manage money because of … traditional gender roles.”

The study also showed that Baby Boomers are the least likely generation to be worried about money, followed by Xers.

The most financially worried generation? Millennials.

Among those between 18 and 34 years of age, 58 per cent said money caused them extreme emotional stress. According to Lo, Millennials may well have good cause to be more worried about money.

“The older generation didn’t deal with the same issues as the younger generation in terms of job security,” he said. “The cost of living and the cost of housing have gone up without necessarily a corresponding increase in the level of salaries.” Across all age groups and genders, 47 per cent of Canadians indicated that money stirred up feelings of extreme emotional distress.

Perhaps unsurprisingly, the poor worry about money more than the rich. While 63 per cent of those whose households brought in less than $25,000 per year lived with extreme emotional distress due to their financial situation, only 49 per cent of those whose households had incomes of between $25,000 and $100,000 felt the same way. When household incomes jump to between $100,000 and $200,000, that kind of distress falls to only 35 per cent of respondents.

Beyond that, higher household incomes didn’t make any difference in anxiety over money troubles, with 35 per cent of those with household incomes of more than $200,000 still reporting extreme emotional stress due to their financial situation.

Often touted as a way to become financially independent, entrepreneurship seems to be a mixed bag for Canadians when it comes to freeing them of money worries. Business owners do report feeling more confident about their abilities to deal with financial troubles and manage their households’ finances.

But there’s a downside. “Business owners also deal with higher levels of financial stress with one in five reporting extreme levels of stress,” states the study. “Specifically, business owners are more likely to be extremely stressed about their ongoing and future financial obligations, and more likely to feel less secure about their job or work situation … They are also significantly more stressed about their ability to provide for their family, pay their monthly bills and living expenses, and have enough money to retire on.”

Compared to Canadians with jobs, business owners are more likely to report their financial worries keep them up at night and take a toll on their health.

According to Duncan, the results of the Financial Health Index, which is available online at www.financialhealthcanada.ca, suggest there are opportunities for governments and financial institutions to develop better programs to serve groups of people who are now struggling.

“We see lots of great work and financial literacy support already being provided by nongovernmental organizations, credit counselling agencies and other organizations for lowerincome households, as well as certain groups, including aboriginal women,” said Duncan.

“Some financial institutions are also doing a good job at serving specific segments, such as Tangerine Bank’s support of Millennials or the Business Development Bank of Canada’s support of the needs of entrepreneurs,” she said. “Yet wider and deeper support is needed, with credit unions and banks in particular having an important role to play.”