FP Canada’s 2024 Financial Stress Index: What’s worrying Canadians right now

This is one of the findings from FP Canada’s 2024 Financial Stress Index, one of the most anticipated reports of the year. It looks at what concerns Canadians financially. What the survey found is that we continue to grapple with financial worries like saving enough for retirement, paying our bills and covering our expenses, and saving enough for a major purchase like a new home, car, a wedding or our children’s education. 

The numbers don’t lie. Of those surveyed, 44% cited finances as their top stressor, which is an increase from 2023 (40%), 2022 (38%) and 2021 (38%). The reasons are external factors like elevated grocery prices (69%), inflation (60%) and housing-related costs (52%).

This has led to anxiety, depression and mental health challenges, especially among Canadians under age 35. There are a ton more findings, so let’s do a deep dive into the report to understand how and why we’re feeling a certain way about money. 

How are Canadians taking control of their finances?

With those numbers, why has the level of optimism increased? Nearly 50% of Canadians surveyed were optimistic about their financial future. 

“The level of optimism has actually increased, and the economic conditions are tougher for sure,” says financial planner Tina Tehranchian, CFP, who is a senior wealth advisor at Assante Capital Management Ltd. “But I think probably one of the biggest contributing factors is the fact that the survey actually showed more than 91% of people are taking steps to put their financial house in order, and they’ve taken at least one action that can help them better manage their finances.”

She says a sense of control creates optimism that it’s possible to do something about your financial situation; it’s helplessness that really leads to depression. That means Canadians are taking actions like paying down debt, up to 38% from last year’s 36%, and tracking their expenses, up to 45% from 2023’s 44%. 

Those who work with a financial professional are more likely to be optimistic about their financial future (56%) and for those who might be thinking of working with one. Tehranchian says, working with a professional accredited with QAFP or CFP (Qualified Associate Financial Planner or Certified Financial Planner) can be a great asset. “Having the professional help you along this path can definitely accelerate the learning curve, can help you make more informed decisions, and it can lead to improved results.”

The financial stress of Canadians under 35

Half of Canadians under age 35 cite money as a top stressor. When asked why they were the most stressed out, Tehranchian says, “I think there are a lot of issues, with the level of inflation being one of them,” she says. “Housing affordability being another, and grocery shopping.”

She also says that while their stress levels are quite a bit higher when it comes to money compared to the rest of the population, the level of optimism has increased in that age group.

“There are things that are out of our control,” says Tehranchian. “You and I cannot control what inflation is going to be, what the Bank of Canada is going to do about interest rates. But there are things that we can control, like budgeting, saving more and paying down debt. And those are [the] things that people have started to take action on.”

Speaking of saving more, there was an unusual trend in saving for retirement.

Women more concerned than men about retirement

While concerns about saving for retirement remain flat at 35% from 2023 to 2024, 37% of respondents who identified as women are concerned about retirement savings compared to 33% of male respondents. 

Tehranchian says there are some obvious reasons for the gender disparity: Women have a longer life expectancy, face barriers to pay equity, and must manage a drop in income during childbearing and caring for children during absences from work.

“These will impact their pensions and retirement savings, which is why women need to be a lot more concerned about their retirement savings than men are,” she says. “It is a really good sign to see that women hopefully are gaining some awareness about that and are acting on it and thinking more for retirement.”

Fewer Canadians are working with advisors and planners

Despite the interest in financial knowledge and taking action to control their finances, most Canadians aren’t working with financial professionals. The number of Canadians working with a financial planner (such as CFP or QAFP) dropped from 5% to 4%, and the number of people working with a financial advisor increased from 16% to 17%. Fewer Canadians are working with a financial professional (which includes advisors, planners, insurance agents. etc.), dropping from 36% to 35%.

One reason is the impression that you need to be rich to work with an advisor. Tehranchian says that while some want to work with large-portfolio clients, there are those who want to work with younger Canadians. The bigger issue is that there aren’t enough financial planners. Online tools are one option for those not working with advisors, Tehranchian says. 

The average age of finance professionals has been increasing, she says. “We have to recruit a lot more younger financial planners, female financial planners to obviously take over the books of business. But also keep in mind, financial planning is a type of business that you can keep doing for as long as your health allows you to. So, there are many advisors in their 70s and 80s who are still working and loving what they’re doing.”

Optimistic about your money? You’re not alone

Still, the optimism in the report is, well, optimistic. “The fact that you know there are things that you have control over, and you are doing the right thing, I think that’s what has contributed to that level of hopefulness,” Tehranchian says.

Read more about financial psychology:

• Canadians are financially stressed—is money trauma to blame?
• Where to get help if you’re struggling financially (and mentally)
• How to deal with money and your finances when the economy is stressing you out
• Investing Beyond the Numbers: Understanding financial flashpoints