This is a reference from Canada about the financial wellbeing of people in Canada. Financial wellbeing is the extent to which you can comfortably meet all of your current financial commitments and needs while also having the financial resilience to continue to do so in the future. It is not only about income. It is about having control over your finances, being able to absorb a financial setback, being on track to meet your financial goals and perhaps, having the financial freedom to make choices that allows you to enjoy your life.
Generally, people who have high levels of financial wellbeing are not stressed about money and are able to cope with unexpected expenses. In contrast, people with low levels of financial well being have difficulty meeting their financial commitment and do not have much money in reserve for emergences. Better financial well being is associated with less stress and greater mental and physical health.
The Financial Consumer Agency of Canada (FCAC) participate in a multi country initiative that sought to ensure financial well being. FCAC conducted this survey to understand and describe the realities of Canadians across the financial well being spectrum ad policy makers, practitioners and Canadians themselves achieve better financial wellbeing.
They determined that there were 5 factors:
- Financial behaviours
- Economic factors
- Psychological factors
- Social factors
- Knowledge and experience factors
The key messages that came from the survey are as follows:
- Many Canadians are doing reasonably well financially
- Income is important , but so are behaviours
- Financial well being has a stronger relation to behaviours than to economic factors
- Canadians who actively save have higher levels of financial well being than those with similar incomes who don’t
- Canadians who avoid borrowing to meet daily expenses have higher levels of financial wellbeing than those who borrow who borrow regularly, regardless of income
- Financial confidence and attitude towards spending, saving and borrowing are important
- For people with less financial well being , financial confidence and feeling in control of the future are strongly related to financial well being.
- Generally, older canadians who make positive financial positive choices and have the benefit of experiences have the highest levels of financial well being.
For more about this result, please read the slideshare: