Video: Financial well-being research in Canada


Rebecca Kong: Thank you, Steve. I'm excited to be here today and to share with you a sneak peak at the Canadian results of the wellbeing survey. Je vais faire ma présentation en anglais, mais il y a des copies disponibles en français si vous voulez. Et je vous invite à poser des questions en français.

We only recently received the data, as you heard, so these results are preliminary, but already we have some interesting insights to share with you today. First, I'll briefly go through the methods, then I'll share with you how Canada did, highlight a few issues that require – that might require a little room for improvement for Canada, and then finally, illustrate the impact that certain behaviours have on financial wellbeing.

So as you know by now, this work was based on Dr. Kempson’s work, and we used her survey questionnaire, so thank you, Elaine, for sharing that with us. Our survey sample was collected on line. It consisted of just over 1900 participants, and they ranged in age from 18 to 91 years old, and about 56 percent of the sample was female.

Now on to the results. So as you can see here, Canada's overall financial wellbeing score was 65, which was in the same ballpark as the other countries, slightly ahead of Australia and New Zealand and a little bit behind Norway. We don't have the data at this time to be able to do statistical comparisons between the countries, but you'll notice a fairly consistent pattern as I go a little bit further into the results, where Norway is coming out on top, Canada a little bit behind, but ahead of Australia and New Zealand.

If we look a little bit deeper into the components that make up financial wellbeing, we can see that Canadians are doing quite well at meeting commitments. And this involves activities such as having enough money to pay for food and expenses and being able to pay bills on time. But Canadians weren't doing quite as well with resilience for the future. This involves things like having money to be able to pay for unexpected expenses and looking at the number of months of income that an individual has saved for the future.

The same pattern held for active savings, which involves things like saving money regularly, intentionally putting money aside for whatever you might need in the future, not borrowing for daily expenses. And the same pattern held again for not borrowing for daily expenses, which involves things like how often somebody uses credit for food and expenses and how often they're borrowing money.

Lastly, we'll look at informed decision-making, which involves things like getting information when you have a financial decision to make and really weighing your options, so looking at the different choices that have and making an informed decision. So you can see on this one that the countries were a little bit closer together. But it's not really because Canada was doing a lot better on that. Norway was not quite as far ahead, for whatever reason.

So a few – a few issues that require further attention. Through these preliminary analyses, we can see that overall Canada's financial wellbeing is pretty good, but it was pretty easy for us to also spot some areas with room for improvement. It'll come as no surprise to most of you in this room that too few Canadians were saving for emergencies. Fewer than 50 percent are not saving regularly for unexpected expenses. Another area of concern is that 14 percent of Canadians are regularly using credit to purchase food and other daily expenses. And this isn't because they're using their credit cards to try and earn those bonus reward points. The question was clear that it was because they ran short of money.

OK. So we all know that there are some aspects of a person's financial wellbeing that it's very difficult for us to modify. Income, for example, is hugely important, but it's difficult for us to do very much about it for a particular individual, at least on the short term. Behaviours, on the other hand, at least have the potential to be changed. I'm not saying it's easy. As Elaine mentioned in her talk, there are a lot of factors – there are a number of factors to do with a person's personality and – and other traits that are strongly influential in their behaviour, but at last behaviour has the potential. So if we can identify which behaviours are making the biggest impact on financial wellbeing, we can look at ways to address any issues that there are. And the – the approaches that we use may need to be really innovative, but at least if we can figure out which behaviours they are, then we know which direction to head our research into figuring out how to make any kinds of modifications.

So what we've done here is we've taken profiles of individuals, and we've shown how two specific financial behaviours impact their overall financial wellbeing. We looked at the combination of not borrowing for daily expenses and actively saving because in our analyses those two behaviours had a large impact on financial wellbeing. So first we'll look at a single female renter. She rents her accommodations. She's in the age range of 18 to 29 years old, and her income is in the second quintile, so 33 to 58,000, not in the very lowest of income but also not in the upper ranges. If this woman is borrowing for her daily expenses and not actively saving, her financial wellbeing score – oops, we have the wrong slides there. Her financial wellbeing score is – is 47. But if she's not borrowing and she is actively saving, then her financial wellbeing score jumps way up to 69. And that's actually above the Canadian average. Just those two behaviours, which are of course associated with a number of other things, but if we're focusing on those behaviours, it has such a huge impact on financial wellbeing.

Similarly, we looked at how those behaviours affect somebody in a different profile. So here we're looking at somebody who is between 30 to 59, so roughly working age, in the middle income quintile, so 59 to 89,000, and is part of a couple relationship. So I'm not going to click the slide because I think it's going to give away my punch line for us if I do that.


So if this person is not saving – not actively saving, and paying for their daily expenses using credit,– can I remember what the number is for it? Should I risk saying what the number is? I think that their score is 46. And if they are saving – actively saving and not using credit for their daily expenses, then their profile jumps by 30 points, their financial wellbeing score. And I got it right.



So of course individuals have different expenses. We know that even within one income bracket, for sure, you know, some people are going to have vastly different expenses that they're responsible for paying for with that income. But it's quite interesting to look at, when we're looking even within that same income bracket and looking at people who have similar demographic profiles, that these two behaviours are associated with such a dramatic difference in scores.

These results reinforce the significance of active savings behaviours. We know that these behaviours have many positive benefits, including helping Canadians to prepare for emergencies, reducing stress related to financial uncertainties, and providing a buffer to avoid relying on credit. The results of this study have also shown that actively savings leads to high levels of financial resilience and overall wellbeing.

As I mentioned, we're just getting started with the analysis of the Canadian data. As we move forward, we're looking to further analyse the factors related to financial wellbeing and look at how those factors vary with socioeconomic factors. Thank you.


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