Finding light in the winter — SAD and debt

In a lifetime, approximately two to six per cent of Canadians will suffer from seasonal affective disorder (SAD), a type of depression that starts in the fall and worsens in winter as the daily amount of sunlight lessens. According to the Centre for Addiction and Mental Health, the shift in light disrupts an individual’s circadian rhythm and disturbs serotonin and dopamine transmissions.

Those who experience the disorder often have symptoms of low mood, disinterest in work or social relationships, fatigue and changes in appetite. From the doldrums to despair, SAD ranges considerably in severity.

Often intensifying the condition is the additional worry of household consumer debt — and the latest figures say it all. The Canadian Payroll Association found 43 per cent of people are living paycheque to paycheque. Even one-fifth of those with a high income of at least $150,000 experience financial stress, and half of Canadians (49 per cent) aren’t confident they can cover their expenses without going further into debt.

Winter is a time of debt renewal. As the bills come rolling in and we firmly close the door on the season of holiday parties, gift-giving and festivities, we’re confronted with our own financial realities and the consequences of our irrational exuberance.

For some, this means recoup and retreat. The cold weather makes it easier for people to stay inside and slow down on spending.

A recent Angus Reid poll commissioned by the nonprofit Credit Canada surveyed the country on how they intend to save or spend their way through the deep freeze in both temperature and finances. The survey also asked whether Canadians foresee their financial situation improving (29 per cent), worsening (12 per cent) or staying the same between now and spring (59 per cent). Interestingly, the younger cohort (18-34 per cent) is by far the most likely to feel their financial situation will improve, at 44 per cent.

When asked what they plan to do this winter to save money, 44 per cent will eat more budget-friendly meals, quickly followed by 42 per cent who intend to keep the lights and heat low. Additional ways to save include watching a lot of streaming TV (39 per cent), cutting down on travel (37 per cent), and staying in until the thaw (18 per cent). Finally, 13 per cent plan to not drink during January or February.

In contrast, when asked how they plan to spend their money to get through the winter, the top answer at four-in-10 Canadians was to eat at restaurants. Other popular responses were shopping (37 per cent), indulge in delivery meals (25 per cent) and take a vacation away from home (23 per cent). Rounding out the list is purchasing more streaming services such as Netflix and Crave (15 per cent) and going out to bars and clubs (11 per cent).

The truth is a great deal of financial decision-making comes down to personality. Despite traditional economic theory, not all money management is rational, and much of it is based on subconscious biases.

Take the snowball vs. avalanche approach to debt repayment. The snowball method focuses on paying as much money as possible towards the smallest debt, regardless of interest rate. Meanwhile, the avalanche approach pays the most money possible towards the debt with the highest interest rate, which is likely to save more in the long run. Logically, the avalanche method makes the most sense, and is therefore typically the choice for Type A personalities. But for those who need motivation to stay on track, the snowball method’s quick upfront wins can make it the better choice.

Either way, it’s important to remember there are free resources available and help on hand. Establishing a financial vision for the future is the perfect place to start. Setting a budget, improving money management skills and taking an active, responsible approach to finances will help in the long-term.

Sigmund Freud famously said that depression was anger turned inward. Yet, like many other aspects of life, there is a combination of internal and external factors. Our social environment, economic pressures, past experiences and genes all have a part to play.

Finding light in winter isn’t easy and dealing with debt at the same time can be overwhelming. As with any mental health or personal finance issue, the most important thing to know is there are options available and people ready to listen. Laurie Campbell, CEO Credit Canada