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In the first report of preliminary findings from the Financial Wellness Lab of Canada at Western University offers hope for those who are feeling the pangs of financial stress.
While financial stress might feel inescapable, the report, entitled Financial Wellness Lab: State of the Nation December 2021, indicates that no matter the depth of that despair, it is possible to overcome — and doing so does not mean you have to make more money or endure a slow, decades-long journey. In fact, 16.1 per cent of Canadians whom the research determined were financially stressed in 2020 were able to move into the financially comfortable category in one year. However, this is not to say moving from financially stressed to being financially comfortable is easy or that there are no obstacles to watch out for.
The report is an early output from the Lab, which is determined to shape a science-based, big-picture understanding of financial wellness and deliver information and tools to help Canadians improve or maintain their financial fitness.
While it can be complex to determine a household’s financial positioning, the report builds on and confirms that Canadians generally fall into three categories of financial wellbeing: financially comfortable, financially coping and financially stressed.
While each cluster is distinct, the comfortable and coping clusters seem to be ‘closer together,’ meaning they share more common traits. As a result, movement between these clusters is more frequent relative to moving out of the stressed group. The gap between the coping and stressed categories is six and a half times wider than the gap between comfortable and coping, which means that once a household falls into a financially stressed position, affecting a change is more difficult. Interestingly, the research has indicated that while making more money can help, it does not necessarily correlate to improved financial wellness.
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