Pattie Lovett-Reid: Survey finds one-third of Canadians won’t recover financially from COVID
The pandemic started as a health crisis, and with a second wave of infections, it clearly still is one. It also continues to be a global economic crisis and with lockdown restrictions on the rise, it has now morphed into a financial crisis for many.
This triple threat has conspired to inflict pain on Canadian families on so many levels.
Narrowing in on the financial element, COVID-19 has wreaked havoc on the financial health of Canadians, according to a new survey by FP Canada. One-third of respondents in the results published Tuesday said they won’t ever recover from this crisis financially.
The results revealed 42 per cent are not in a strong enough financial position to handle the challenges of a second wave, while nearly 41 per cent said they already feel they are in a worse financial situation today than they were before the pandemic began.
Some may have thought millennials would suffer the hardest economic hit due to the pandemic. This cohort hasn't been able to gain traction from the last financial crisis, they continue to be highly indebted, and career opportunities have been scant at best.
However, according to FP Canada, it appears the sandwich generation – those in their 40s and 50s who are caring for aging parents while also raising their children –may be in a worse position. The survey results show less than half in that age group don't believe they will recover from pandemic-induced financial strains. Many have had to draw on personal savings or take on more debt to make up for money shortfalls to cover expenses.
There is, however, a glimmer of hope. According to the survey, those who worked through COVID-19 with the assistance of a financial planner where substantially more likely to report feeling confident about their financial well-being at the onset of the pandemic (77 per cent) than those who didn't use one (57 per cent).
- Sign up for BNN Bloomberg's new weekly newsletter, Home Economics, here: https://www.bnnbloomberg.ca/subscribe
I have long been of the belief that everyone – regardless of financial status – deserves a financial plan and that working with a professional isn't only for the wealthy. In the interest of full disclosure, I am a financial planner registered with FP Canada; however, here is what I personally believe to be the three key benefits of financial planning.
1. A financial plan is all encompassing and includes elements of your financial life from goal-setting, to insurance to debt management, to name a few.
2. It helps you set up an emergency fund that can assist with maneuvering through unexpected life events.
3. When you have a plan, it can help you accelerate savings, help you feel more confident and give you piece of mind.
Having a financial plan won't guarantee financial success but it can help to increase your odds. The nice thing about a plan is it isn't craved in stone and allows you to focus in on the areas requiring corrective action immediately. This can help increase your odds of financial success.