More than half of Canadians describe themselves as “financially paralyzed” and nearly as many report insufficient funds to sustain their current standard of living, a new survey suggests.
A new Royal Bank of Canada (RBC) poll found that 55 percent of those surveyed reported feeling financially stuck while 48 percent said they lack the necessary funds to sustain their current living standard. An additional 29 percent said their finances are “in a constant state of chaos.”
The national survey uncovered that many Canadians are not only stretched thin financially, they are experiencing significant anxiety because of it, said RBC regional financial planning support director Craig Bannon.
“As financial flexibility continues to erode, it’s not surprising to hear that Canadians are feeling anxious and uncertain about what steps they can take to try to find their footing again,” Bannon said in a Jan. 23 release.
The poll also found that 44 percent of Canadians are worried it’s only a matter of time before they’ll run out of money to live comfortably and 48 percent said they don’t think they’ll ever be able to get ahead financially.
An additional 47 percent said it is difficult to think about their financial future when they are struggling to handle their day-to-day expenses and 18 percent said they were already on the edge financially. Half of those surveyed said they spend their entire income on essential bills and expenses and 47 percent have been forced to dip into their emergency fund or retirement savings, to help cope with rising costs.
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Taking on debt to cover monthly basic needs has also become more common with 27 percent of those polled engaging in that practice.
It is also becoming increasingly common for individuals to take on debt to address their monthly fundamental needs, the survey found. Twenty-seven percent of those surveyed admitted to this practice while 23 percent have asked family for money or moved in with relatives to make ends meet.
Meanwhile, 60 percent of Canadians surveyed reported anxiety about their financial capacity to handle unexpected costs.
Regional Differences
The highest incidence of Canadians feeling “financially paralyzed” was observed in Atlantic Canada, where 73 percent reported this sentiment. Residents of Atlantic Canada were also most likely to be unable to maintain their standard of living due to rising costs and were the most pessimistic about their ability to get ahead financially at 61 and 62 percent respectively.
Canadians residing in British Columbia were the second most likely to feel financially stuck at 59 percent, while 53 percent said they couldn’t afford their current lifestyle. B.C. residents were only slightly more optimistic than Atlantic Canadians about their financial future with 57 percent saying they will never get ahead financially.
Quebecers had the least number of concerns out of all the provinces. Quebec was the lone province to have less than 50 percent of respondents report financial paralysis and also had the lowest rate of respondents worried about having the funds needed to maintain their lifestyle. It came in at 47 percent and 42 percent in the first two categories while only 33 percent said they would never get ahead financially.
The survey was also broken down into three age groups: Millennials, Gen X, and Boomers.
The youngest age group—29 to 44-year-olds—were the most likely to be worried about their finances while Boomers were the least concerned.
Sixty-three percent of Millennials said they felt financially paralyzed compared to 55 percent of Gen Xers, and 46 percent of Boomers aged 61 to 70.
Millennials also reported being the least prepared for an emergency, with 69 percent saying they didn’t have the money to cover unexpected costs. That figure dropped only slightly to 64 percent for the 45 to 60 age group but dipped to 48 percent for Boomers.
