The Financial Planners Standards Council commissioned a survey last month asking Canadians about their financial stresses; here’s what they said:
More than eight-in-ten (83%) of Canadians said they have at least one financial regret; topping the list 25% said they either wished they saved more or started investing earlier. Not investing in real estate property (8%) and wishing they had done more schooling and achieved a higher education (7%). A further 5% would not have incurred debt and/or overspent on credit cards.
The survey further reveals that money is the greatest source of Canadian’s stress, surpassing health, work and relationships. More than half of women (51%) and a significant number of men (44%) admitted to having lost sleep due to financial concerns. Canadians feel pressure to keep up with their peers and are embarrassed about their lack of control over their finances. Millennials and those that earn less than $40,000/yr are more embarrassed about this lack of control than other age group.
Tips to Avoid these Financial Regrets:
Start saving small amounts on a monthly basis, you can start with as little as $25. Increase this amount as you get use to it and your income increases over time. If you are putting this money into an RRSP at the end of the year you can take out a small top up loan, then pay off the loan with your tax refund.
If your employer offers an investment plan; take advantage of it. They will deduct the money right off your paycheque giving you immediate tax relief. In addition, most plans will match your savings – this is free money – take it! Invest your savings into something that will grow faster than the rate of inflation (2.2%) ask a Financial Planner to help you choose an investment based on your age, how long the money will be invested and what you are saving for; whether it be real estate, going back to school or the lifestyle you want to live in retirement.
If you are feeling a lack of control over your finances remember it all starts with your day-to-day spending. Controlling your cash flow reduces stress and allows you to enjoy life without worrying about keeping your head above the water. Credit and Debt cards have made it easy to forget how much we actually spend on unnecessary items. Keeping track of how much you are spending will give you a new appreciation for your hard earned money. Review your expenses regularly and try to cut down where you can without being too restrictive.
Most of these regrets can be avoided by working with a Certified Financial Planner. Studies have shown households that work with a Financial Advisor for more than 15 years build 2.73 times more wealth than those who do not. Investors who work with advisors also benefit from a greater savings discipline. In fact, they have been shown to save at twice the rate of non-advised investor.
Bottom line, if you want a sound sleep, get a sound financial plan.
Have a great weekend, and Happy Mother’s Day,
Tracey
Sources: Article posted on Advisor.ca 05-07-18 by staff, FPSC Survey conducted by Leger March 30-April 2, 2018. Econometric Models on the Value of Advice of a Financial Advisor; CIRANO; July 2012, The Money Finder
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