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Is Financial Security Part of Your Wellness Strategy?

Is Financial Security Part of Your Wellness Strategy?

Mar 15, 2019

Financial stress affects almost half of working Canadians and cuts across all income levels. Planning for the future can play an important role in our overall sense of well-being.

Life in the early 21st century comes at you fast, and many of us recognize that attending to our emotional and physical health is a key component of living life to its fullest.  There’s no shortage of advice out there about how to lead a healthier, happier lifestyle. But interestingly, popular strategies rarely address what the Financial Consumer Agency of Canada (FCAC) says is our biggest source of stress: financial worries.

It’s Not Just About How Much Money We Make

Our income level doesn’t seem to play a role when it comes to worrying about money, says FCAC. In fact, 48% of Canadians have reported losing sleep over concern about their finances, regardless of their annual paycheque. Meanwhile, a recent wellness survey conducted by Mercer Canada Financial revealed that most Canadians over 50 don’t have a strategy for retirement.

Getting out to the gym regularly and eating properly can certainly have a hand in keeping us healthy and giving us an overall sense of well-being. It turns out, though, that if the financial piece of the puzzle is missing from our wellness strategy, we might be in trouble.

People dealing with financial stress are twice as likely to report overall ill-health and are four times as likely to experience sleep problems, headaches, and other illnesses. More disturbing is the fact that unease about money can lead to even more serious problems like high blood pressure, anxiety, and depression.

Tool to Use Today to Prepare for Tomorrow

The good news is we can readily adopt strategies that may ease stress and dial back anxiety. A crucial part of a good well-being plan means being able to pay for our immediate and ongoing expenses. Importantly, self-care also means having a sense of control over future financial needs. With a bit of smart planning we can gain the freedom to enjoy the things in life that matter to us.

Keeping up with monthly payments is often challenging enough, so it might seem counterintuitive to spend valuable energy thinking about the future. But there’s a huge difference between constantly worrying about the future and creating a written financial plan that will help achieve our life goals. Fortunately, in Canada there are some tools available to help along the way.

Registered Retirement Savings Plans (RSPs) can be useful for decreasing taxable income today and setting some money aside for retirement. If the company or organization you work for has a contribution-matching plan, check it out. Taking advantage of these types of programs can help you get started on saving for your future.

Tax-Free Savings Accounts (TFSA) might also work well for many. These unique savings accounts don’t reduce your tax burden up front, but any interest or dividends they pay out in the future will not be taxed, which means tax-free income that you can readily withdraw when needed with no penalties.

Investing in Your Children’s Education

It’s projected that children born in 2018 can expect to pay up to $126,000 for tuition and living costs when they head to university in 2036. Parents can help mitigate this burden on their children by participating in RESPs and taking advantage government grants like the Canada Education Savings Grant (CESG). The CESG offers a 20% matching grant up to $7,200 from the Canadian government. Families with a net income of less than $93,208* can accumulate CESG more quickly with Additional CESG. The income earned in an RESP is tax deferred as long as funds remain in the plan, and the earlier you start saving the more time your investment has to grow. Knowledge First Financial helps parents choose the right approach for them and their future goals. Our RESP specialists can help ensure you’re on track to achieve the goals that are right for your family.

Modest income families don’t have to be left behind. With the Canada Learning Bond, you can get started on your education savings without making any contributions. Based on net family income* and number of children, $500 will be deposited into your child’s RESP. An additional $100 is deposited into the RESP to a maximum of $2,000, until your child turns 15. Knowledge First Financial has committed to helping 10,000 families who qualify for the Canada Learning Bond (CLB) with a flexible, no-cost CLB-only plan. The CLB is a financial contribution made by the Government of Canada for your child.

No matter your income level, if you’ve committed to a wellness regime, be sure to investigate all of the tools available that will help you and your family feel secure today and tomorrow.

*Income levels indexed annually.


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