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Pattie Lovett-Reid

Chief Financial Commentator, CTV

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Financial stress has a serious impact on Canadians' work life.

 According to the 2016 Sun Financial Canadian Health Index, 29 per cent of Canadians are distracted at work as a result of their financial situation.

These are the four top drivers of uncomfortable levels of stress for Canadians are all related to financial challenges:

  • 45% worry about personal/household finances
  • 32% worry about trying to maintain a budget
  • 31% worry about unexpected expenses

When asked about the largest barrier to overcome :

  • 48% said current income
  • 25% said current debt level - mortgage and credit cards
  • 24% said current employment situation - contract and temporary work

Adding to this some of the stress we already feel, we can also place self-induced stress on ourselves by having unrealistic expectations and setting unrealistic goals.

I’ll give you an example. A recent RE/MAX survey highlights that home ownership remains a priority for Canadians, with 53 per cent of respondents in a recent RE/MAX survey conducted by Leger expressing intent to purchase a home and 47 per cent expressing intent to do so in the next five to 10 years. Nearly one in three (30 per cent) Canadians plan to use the purchase of a home as an investment strategy to help fund their retirement and 42 per cent of millennial respondents view it as a retirement funding strategy. In fact, many are even considering getting creative by exploring co-ownership strategies, renting a room or even engaging in Airbnb. The point is you need to be financially secure for homeownership and hoping your home funds your retirement may be unrealistic. Diversification works and putting all of your eggs in the real estate basket is a dangerous strategy.

Getting on the path to financial health can be achieved and yet can also be intimidating. Here are a few tips:

  • If your employer offers a workplace pension plan with a matching component - it is free money and contribute the maximum amount possible
  • If you don't have an employer plan create your own retirement saving plan by using annuities or segregated funds
  • Save early in life and put money away often - the sooner the better to benefit from time and compounding. Use RRSP's and TFSA's when possible
  • Create your own financial plan, set reasonable goals, retire debt aggressively