Why Financial Well-Being Matters

Why we’re working to reduce peoples’ financial vulnerability and financial stress

In our uncertain world, many households are financially stressed, especially with the high cost of living and other challenges affecting them. Based on the June 2021 the Seymour Financial Resilience Index ™, just 69% of Canadians have some level of financial vulnerability to financial hardship, stressors and shocks (i.e. are not ‘Financially Resilient’, with a financial resilience score of 70.01 or more).

Financial resilience and financial well-being is vital to overall emotional and physical wellbeing, family stability and people achieving their life goals – not just for today but for generations to come. Our Index confirms that not only are more financially vulnerable households more challenged on all elements of their personal well-being, but face much more systemic barriers and have significantly lower household savings rates and more. Our data also highlights how financial stress is mainstream in Canada, and a pervasive issue.

While some households face systemic barriers and these issues are complex to understand and address, we are helping Financial Institutions, NPOs, policymakers and other organizations to help measurably improve the financial resilience of their customers, employees and communities at scale. Contact us to discuss how we may be able to work with your organization in line with your goals.

Definitions

Financial Health

 

The ability to balance your financial needs of today with those of tomorrow, as a result of decisions and behaviours that move you forward

Measured through many financial health and behavioural indicators in the longitudinal Financial Well-Being study (2017-2022).

Financial Resilience

 

The ability to get through financial hardship, financial stressors or ‘shocks’ as a result of unplanned life events

Measured at the national, provincial, segment and individual household level through the Seymour Financial Resilience Index TM

Financial Wellness

 

Emotional peace of mind in terms of your financial situation and current and future financial obligations. The opposite is financial stress

Measured through many financial stress, debt stress and financial wellness indicators in the longitudinal Financial Well-Being study (2017-2022)

Linkages between financial well-being and other dimensions of quality of life

The linkages between financial well‐being and other dimensions of quality of life are also measured through the 2017‐2021 Financial Well‐Being studies, providing insights by financial resilience segment and for demographic groups. These include renters, homeowners with and without a mortgage, single parent families, Indigenous Canadians, low income families and borrowers struggling with their debt manageability with high levels of stress over their current and future financial obligations. Respondents who scored as ‘Extremely Vulnerable’ through the Index were much more likely to report low financial well‐being, emotional well‐being and mental health, physical well‐being, satisfaction with work, and feelings of connectedness with neighbours and community, and to have poorer relations with friends and family

 

Significant differences in financial well-being and other well-being dimensions: with evidence of increased challenges for more financially vulnerable populations

Personal Well-being
Seymour Financial Resilience Index TM June 2021 with 5000 households

The financial resilience gap and inequities for Canadians

The Seymour Financial Resilience IndexTM highlights a ‘financial resilience gap’ for Canadians. There are inequities for households evidenced through the Index, which in turn impact the financial well‐being and overall well‐being of Canadian individuals and families. For example, based on the February 2021 Index:

  • 83% of ‘Extremely Vulnerable’ and 65% of ‘Financially Vulnerable’ households reported facing significant financial hardship, compared to 36% of ‘Approaching Resilience’ and 11% of ‘Financially Resilient’ households.
  • 37.2% of ‘Extremely Vulnerable’ Canadians reported that their household income had decreased in the last year by more than 25%, compared to 6% among ‘Financially Resilient’ households.
  • 58% of ‘Extremely Vulnerable’ households reported that their household was unable to meet their essential expenses (shelter, food, utilities and transport) compared to 2% of ‘Financially Resilient’ households.
  • 43% of ‘Financially Vulnerable’ households had a zero or negative household savings rate, compared to 3.3% of ‘Financially Resilient’ households.
  • 70% of ‘Extremely Vulnerable’ Canadians drew down their savings and 26.4% used a food bank compared to rates of 10.5% and 1% respectively for ‘Financially Resilient’ households.

Women and single-parent families

As of June 2021, the mean financial resilience score was 53.41 for women compared to 57.9 for men, highlighting a continued ‘financial resilience gender gap’. Single parent families are also more financially vulnerable based on their mean financial resilience scores, as are other populations such as low-income Canadians and others. For other insights please see our reports (link to reports page)

Read E-Brief on how the financial well-being and and other elements of personal well-being are more challenged for financially vulnerable Canadians

Statistics Canada-Seymour report on the financial resilience and financial well-being of Canadians

Financial Resilience Index – New Tool to refine Income Support