Money’s nice, for sure, but how much a person earns doesn’t necessarily correlate to financial wellness, suggests a new study.
The study by the Canadian Payroll Association and the Western-Laurier Financial Data Analytics Laboratory (The Western-Laurier Lab) found that 20 per cent of those with a household income of at least $150,000 were still financially stressed. By comparison, roughly 50 per cent of those with household incomes below $50,000 were also found to be financially stressed.
Half of Canadians over 40 are financially stressed
Similarly, preconceptions about millennials struggling to make their way in the world and feeling financial stress as a consequence proved to be inaccurate found the study. Fifty per cent of those who are financially stressed are over the age of 40 — 25 per cent of whom have reached the half-century mark.
What the research reveals is that what’s most important is the ability of working Canadians to deal with brief financial setbacks— like missing a paycheque — and their savings habits that most affect financial stress.
Employers should lead Pay Yourself First programs
"Whether it's in the spirit of the season or not, when we spend beyond our means, financial stress follows,” says Peter Tzanetakis, president of the Canadian Payroll Association. “Payroll can help. Not only by ensuring every employee is paid accurately and on time, but by leading the implementation of Pay Yourself First programs to help employees put aside what they can every time they are paid."
The research found that working Canadians belong to one of three groups: those who are financially stressed, financially coping, or financially comfortable. Approximately one-third of all respondents fall into each cluster.
Tzanetakis says employers need to pay attention to the findings because financial stress costs the Canadian economy nearly $16 billion in lost productivity each year.
