Smart Money: Canadians stressed about finances as debt levels rise, exclusive poll finds

WATCH ABOVE: Canadians are having difficulty planning their financial future according to a new Ipsos-Reid poll for Global News. And, as Sean O’Shea reports, it’s stressing people out.

What keeps Canadians awake at night? Apparently, ‘it’s the economy, stupid.’

With volatile gas prices, major retailers closing their doors, mounting job losses, warnings of a bursting housing bubble, threats to pension plans, stock market woes and the shrinking value of the Canadian dollar on world markets, no wonder Canadians are stressed about their money.

That is the overwhelming conclusion in an exclusive Global News/Ipsos Reid poll asking Canadians about the state of their finances.

What keeps us up at night?

Some highlights from the poll – nearly half (45 per cent) say that their income, or keeping a steady income, causes them stress.

• 40% are stressed about saving for retirement
• Saving for big-ticket items, like a car or a down payment for a home, is another cause of stress for four in 10
• Paying bills on time and credit card debt is a cause of stress for one in three
• Mortgage or rent payment concerns affect one in three
• 25% are stressed about caring for their dependents like aging parents or kids

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“This stress isn’t surprising, given that household debt levels continue to rise, along with the cost of food and other necessities,” said Sean Simpson, Vice President, Ipsos Reid Public Affairs.

Canadians are indeed neck-deep in debt – for every dollar we earn, we owe lenders $1.63. According to recent numbers from Equifax Canada, the average Canadian owes $20,891 (and that doesn’t include mortgage debt).

“Interestingly, Canadians are less stressed about the must do’s, such as paying for dependents or making rent or mortgage payments than they are about the should do’s, like saving for retirement or for big-ticket items. This is where they’re falling behind. When interest rates eventually rise, I suspect more will feel stressed as that mounting credit comes back to haunt Canadians,” said Simpson.

From stress to smart money

Canadians are being forced to rethink how they save for retirement, own a home, future-proof their career choices and develop new strategies for managing wealth and debt.

That’s where we come in. For the months of February and March, Globalnews.ca is producing a special series called “Smart Money” — aimed at helping Canadians make smarter choices with their cash.

In this series, Global News will use touching personal accounts and never-before-published data to paint a picture of a personal finance crisis rarely discussed but with huge implications.

This week, we look at “the plan.” While 75 per cent of Canadians say they are financially literate, only half admit to having a financial plan they actually follow. Another 10 per cent have a plan but don’t follow it. That leaves roughly four in 10 without a plan.

We’ll start with a personal account from Global News’ Leslie Young, looking at how she compares to the average Canadian. Also this week, our experts will offer advice on what to do when you’re just starting out, how to start a financial plan and what tools and resources are available to help you on your way.

What ever happened to the golden years?

What about the plan for your retirement? Only half of Canadians say they are actually saving for their retirement.

“As housing and other costs rise, there’s less money for Canadians to allocate towards the things they know they should be doing, like saving for their retirement,” Simpson told Global News.

Hot, hot housing

Clearly real estate is an important cornerstone for many Canadians’ retirement plan. But getting there may get ugly in the months to come. Although perceptions differ across the country, half (48 per cent) ‘agree’ that “we’re in a housing bubble and home prices will come down significantly over the next few years.”

“We all thought interest rates would rise, and now they’re falling again,” said Simpson. “Part of this is people in markets like Atlantic Canada looking in and pointing fingers at Toronto, Calgary and Vancouver and believing things can’t continue the way they have been. But there is some sense in Alberta that the market might be in trouble – and we’re already beginning to see signs of it,” he said.

Are you asset poor?

What does it really mean to be poor? If you measure poverty by what you save rather than what you earn, Canadians are way worse off than we thought. In an economy characterized by instability, that’s worrisome news.

Our poll also showed less than half of Canadians say they have enough money saved up to cover three months’ worth of expenses if they lost their job. What about you? We have an asset calculator to help determine if you have enough of a financial cushion to tide you over in case of catastrophe.

Jobs, jobs, jobs (or lack thereof)

While just staying employed is job number one for many, a growing number of working Canadians, especially millennials, career hopping is becoming the new normal. Our poll shows one in three (34 per cent) say that they are considering a change in the next year.

“Some of this is likely a desire start climbing the ladder, as internal promotions are harder to come by in a time of economic uncertainty,” he said. “The other part is that there’s no pension tethering workers to the same employer for decades, so they feel more at liberty to shop around for the career they like best,” said Simpson.

Follow the conversation online at Globalnews.ca/smartmoney and on Twitter, #GNSmartMoney.

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The data, summaries and commentary in exclusive Global News / Ipsos Reid polling are subject to copyright. The data, summaries and commentary may only be rebroadcast or republished with full and proper attribution to both Global News and Ipsos Reid in all web articles, on social media, in radio broadcasts and with an on-screen credit for television.