Navigating Financial Stress: Strategies for Newcomers From The 2024 Financial Stress Index Report

Key Takeaways

• 91% of Canadian residents are actively reducing financial stress by tracking expenses, paying down debt, and saving more.
• Financial stress is taking a toll on the mental health of people living in Canada, but there is hope. 
• Accessing help from financial professionals can significantly reduce financial stress and increase optimism.
• These findings are particularly important for newcomers to Canada because newcomers experience significantly higher levels of financial stress and food insecurity than those born in Canada.

Canada’s Financial Stress Index 2024 Report

The Financial Stress Index 2024 report found: 

• Money remains the top stressor for Canadians, rising to 44% in 2024, up from 40% in 2023 and 38% in 2022. 
• Anxiety, depression, and other mental health issues due to financial stress affect 38% of Canadians, slightly up from 36% the previous year. 
• Nearly half (49%) report losing sleep over financial worries. 
• Despite these challenges, optimism is growing, with 50% feeling more hopeful about their financial futures compared to 47% in 2023. 
• Additionally, 91% are actively adopting strategies to reduce financial stress and manage economic pressures.

Strategies For Newcomers To Reduce Financial Stress

Newcomers to Canada experience higher levels of financial stress than those born in Canada, according to Mental Health Research Canada (MHRC). Earlier this year, MHRC released a report showing that newcomers to Canada experienced greater stress about mortgage and rent payments and food insecurity than those born in Canada. This report also noted that these stressors were taking a toll on the mental health of newcomers. 

The strategies laid out in the 2024 Financial Stress Index may help to alleviate some of the financial stress newcomers face: 

Proactive Strategies to Reduce Financial Stress

A significant 91% of Canadians are actively embracing strategies to manage financial stress. Popular methods include tracking expenses (45%), paying down debt (38%), saving more (33%), and creating a budget (30%). 

Other proactive strategies include: 

• Building an emergency savings fund. 
• Getting advice from a financial advisor. 
• Building a financial plan. 

We surveyed our team members (which includes more than a few newcomers to Canada) and here are the strategies we’re using to manage our finances in 2024: 

• 75% of us are saving more. 
• 75% of us have focused on paying down debt. 
• 62% of us are tracking our expenses. 
• 62% of us have created a budget. 

We also recommend checking out our article about managing your finances as a newcomer to Canada for more budgeting tips. 

Understanding Major Financial Stressors

The 2024 Financial Stress Index reported that the top three financial stressors are bill payments, saving for retirement, and saving for major purchases (such as a car or house). Debt was another significant financial stressor, with lack of control, job stability, and investing also making the list. 

Knowledge really is power when it comes to understanding and managing financial stressors. If you know how much you will need to pay, on average, for your monthly bills, you can create a monthly budget you’ll actually be able to stick to. In time, this information allows you to automatically save for retirement (by paying yourself first), plus you can start to set aside money for financial goals and an emergency fund. 

Consider Working With A Financial Professional

The report highlights that working with financial professionals can significantly reduce stress. Canadians who consult financial professionals are less likely to lose sleep over financial worries and more likely to feel optimistic about their financial futures. As a newcomer, seeking professional financial advice can provide guidance and peace of mind.

Understanding The Impact Of High Living Costs

Elevated grocery prices, inflation, and housing costs are major contributors to financial stress in Canada. Nearly 69% of Canadians report that elevated grocery prices directly impact their financial stress, followed by inflation (60%) and housing-related costs (52%). 

As a newcomer to Canada, it’s important to understand the impact of high costs of living on your quality of life in Canada. It’s still very possible to enjoy a high quality of life in Canada, but you may need to be strategic in your decision-making. For example, if you live in an area with very high rental or property prices, there may be trade-offs you’ll have to make regarding your disposable income. If you spend more on housing, naturally you’ll have less other money to spend on luxuries. 

Mental Health Awareness

Financial stress significantly impacts mental health, and 54% of those surveyed said that financial stress has negatively impacted their life. A further 38% of Canadians reported anxiety, depression, and other mental health challenges in the 2024 Financial Stress Index. 

Understanding the link between financial stress and mental health can encourage newcomers to seek support from qualified mental health professionals. If you do not currently have private health insurance or your employer-provided insurance is insufficient, consider getting a free quote from our partner Cigna Global.

There Is Hope For Your Financial Future

The 2024 Financial Stress Index noted that half of those surveyed are feeling more hopeful about their financial future today than a year ago.

Keys for those feeling more hope is earning more than $50,000 per year or increasing the amount of disposable income you have. For newcomers who are earning less than $50,000 annually, it may be worthwhile creating a plan to increase your earnings above this amount.

The report also highlights changing trends in what it means to achieve financial well-being. There are fewer people reporting that they want to own a home or be debt free. Instead, people are focusing on retiring comfortably and seeking a feeling of not having to worry about money day-to-day as the keys to financial success. There are also more people focusing on purchasing luxury goods or travel experiences. 

To access more resources and support to settle in Canada, create a free account with Moving2Canada. Our platform provides essential information, tools, and community support to help you succeed in your new home.