Uncertain income flows makes it harder to budget and save and puts people at greater risk of financial calamity, according to new research from Chartered Professional Accountants of Canada (CPA Canada).

According to the report, The Perils of Living Paycheque to Paycheque: The Relationship Between Income Volatility and Financial Insecurity, more than a third of Canadians report volatility in their monthly incomes. The volatility may relate to the source of the money, the amount received or both. The report also found that “those precarious and uncertain income flows put people at greater risk of financial calamity.”

CPA Canada noted that income volatility is not new. Occupations such as fishing or farming traditionally have unpredictable earnings and widely differing income flows throughout the year. “However, workplace shifts towards short-term, task-oriented employment – the "gig" economy – make it increasingly hard for many people to know where their next paycheque is coming from and how much that payday will bring,” the research underlined.

The CPA Canada report suggests that public policy planners, financial institutions and those engaged in financial literacy education work to develop new creative approaches to assist those facing unstable incomes flows. "The sole focus cannot be on overall earnings," says Francis Fong, chief economist at CPA Canada. "We need programs and strategies that either help people achieve a more consistent income flow or better enable them to cope with the problems and uncertainties that are associated with income volatility."

To learn more, consult the study here.