Why Financial Well-Being Matters

Why we’re working to reduce peoples’ financial vulnerability and financial stress

In our uncertain world, many households are financially stressed and financially vulnerable, especially with the high cost of living and other challenges affecting them. Based on the June 2022 Seymour Financial Resilience Index ™ 77.8% of Canadians have some level of financial vulnerability to financial hardship, stressors, with the nationalmean financial resilience score 50.52 as of June 2022, with households overall ‘Approaching Resilience.’ There has also been an increase in ‘Extremely Vulnerable’ households with these representing 21.1% of the population, or 4.34 million households, an increase the past year.

Financial resilience and financial well-being is vital to overall emotional and physical wellbeing, family stability and people achieving their life goals – not just for today but for generations to come. Our Index confirms that not only are more financially vulnerable households more challenged on all elements of their personal well-being, but face much more systemic barriers and have significantly lower household savings rates and more. Our data also highlights how financial stress is mainstream in Canada, and a pervasive issue.

While some households face systemic barriers and these issues are complex to understand and address, we are helping Financial Institutions, NPOs, policymakers and other organizations to help measurably improve the financial resilience of their customers, employees and communities at scale. Take a look at the Financial Well-Being Framework developed in 2016 for more information.

Contact us to discuss how we can support your impact and business goals.

Definitions

Financial Health

 

The ability to balance your financial needs of today with those of tomorrow, as a result of decisions and behaviours that move you forward

Measured through many financial health and behavioural indicators in the longitudinal Financial Well-Being study (2017-2022).

Financial Resilience

 

The ability to get through financial hardship, financial stressors or ‘shocks’ as a result of unplanned life events

Measured at the national, provincial, segment and individual household level through the Seymour Financial Resilience Index TM

Financial Wellness

 

Emotional peace of mind in terms of your financial situation and current and future financial obligations. The opposite is financial stress

Measured through many financial stress, debt stress and financial wellness indicators in the longitudinal Financial Well-Being study (2017-2022)

Linkages between financial well-being and other dimensions of quality of life

The linkages between financial well‐being and other dimensions of quality of life are also measured through the 2017‐2021 Financial Well‐Being studies, providing insights by financial resilience segment and for demographic groups. These include renters, homeowners with and without a mortgage, single parent families, Indigenous Canadians, low income families and borrowers struggling with their debt manageability with high levels of stress over their current and future financial obligations. Respondents who scored as ‘Extremely Vulnerable’ through the Index were much more likely to report low financial well‐being, emotional well‐being and mental health, physical well‐being, satisfaction with work, and feelings of connectedness with neighbours and community, and to have poorer relations with friends and family.

We know that the financial resilience and well-being of individuals support family well-being and community well-being, across generations. Small business financial health and resilience is also critical to our economy.

There are close connections between peoples’ financial health and their overall well-being. This is something we have been reporting on since 2017 with financial stress and vulnerability having serious impacts on peoples’ lives.

Based on the June 2022 Index:

  • 70% of people say money worries impacts their mental health
  • 49% say money worries makes them physically ill
  • 46% say money worries impact their productivity or performance at work
  • 72% say money worries causes emotional stress and
  • 47% say money worries make them feel isolated

In addition, ‘Extremely Vulnerable’ and ‘Financially Vulnerable’ individuals and families (with a mean financial resilience score of 0-30 and 30.01 to 50 respectively) have lower levels of well-being across all well-being dimensions.

 

 

Read E-Brief on how the financial well-being and and other elements of personal well-being are more challenged for financially vulnerable Canadian

Statistics Canada-Seymour report on the financial resilience and financial well-being of Canadians

Financial Resilience Index – New Tool to refine Income Support