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Money Problems Affecting You at Work?

Written by Kelley Keehn

Monday, January 20th, 2020

According to a survey from the Canadian Payroll Association (CPA), 43 per cent of workers are financially stressed to the point where their performance at work is suffering.

The Association calculates that financial stress deducts nearly $16 billion a year in lost productivity from the Canadian economy.

“Initially, we were tracking how many people are living paycheque to paycheque, and this year, we've expanded it," says Steven Van Alstine, Vice President, Education at the Canadian Payroll Association. "People are struggling and spending more than their net pay on increased expenses and debt repayment. That's driving their stress."

Why Canadians Are Stressed, According to the Canadian Payroll Association

  • Almost a quarter of working Canadians say they spend just under 40 minutes each day distracted by personal financial matters at work.
  • The most significant concerns centered on rising costs of living — including housing costs and looming increases in interest and mortgage rates — with 40 per cent reporting they feel “overwhelmed" by the amount they owe.
  • One out of three admits that their debt has increased since 2018, and that they are still spending more than their net pay.

What's the Solution?

The simplest antidote to financial stress is creating a cushion that can get you to retirement, but also provides a safety net in times of unexpected costs.

As a rule of thumb, Certified Financial Planners generally recommend a savings rate of at least 10 per cent of net income, yet the survey shows that two-thirds of employees fail to reach that goal. And more than four in 10 employees (43 per cent) are living paycheque to paycheque. That leaves little room for saving.

Take Advantage of Saving Options from Your Employer

Check with your employer to see what saving options exist at your workplace. The CPA says 55% of employers offer a Pay Yourself First program. For employees who sign up, a percentage of their paycheque goes right into savings before they ever see it. It's a great way to save without having to be disciplined because it's done for you!

Take the time to read through your benefits package or call your provider or human resources department to see if your employer offers a matching program. It's estimated that employees are missing out on over 3 billion dollars of free money each year!

Helping Yourself to Alleviate Stress

What if you don't have an employer program to take advantage of? You can easily set up a TFSA (or even just a regular savings account) and automate your own savings.

Even if you start with saving five dollars a day, that could grow to over $1,800 at the end of the year, which could alleviate some stress and increase your state of well-being as you fund your own emergency fund. You might also want to see if your bank offers any budgeting tools to help you build smart money habits.

Once you've developed the habit of saving regularly, you can then consider saving for retirement by setting up an RSP and possibly increasing the monthly amount you've been socking away. The key is to use automation to your advantage.

Van Alstine also recommends automating other recurring bills, like credit card and line of credit payments, to “set them and forget them."

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