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 February 2023 Seymour Financial Resilience Index® 78% of Canadians have some level of financial vulnerability to financial hardship, stressors, with the national mean financial resilience score 51.24 as of February 2023. 18% of the population, representing 4.65 million Canadians, are ‘Extremely Vulnerable’ with financial vulnerability spanning all household income demographics.

Financial resilience and financial well-being are vital to overall emotional and physical well-being, 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. The Index highlights how financial stress is a mainstream issue and has many negative impacts on the well-being of individuals, families and communities overall and those who are more financially vulnerable.

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 Financial Well-Being Framework for more information.

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. 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.

We know that the financial resilience and well-being of individuals support family well-being and community well-being across generations. Small businesses’ financial health and resilience are 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 people’s lives.

Based on the February 2023 Index:

• 67% of people say money worries impact their mental health
• 47% say money worries make them physically unwell
• 44% say money worries impact their productivity or performance at work
• 70% say money worries cause emotional stress and
• 52% say money worries make them lose sleep at night

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 Canadians