Financial and mental balance: Managing stress

Learn how to manage financial stress and its impacts on mental health with our experts, Sébastien Mc Mahon and global health advisor Jessica Poirier. On October 10, World Mental Health Day, discover actionable tips to manage your finances and prioritize your mental wellbeing.

Ashleay: Hello to all our listeners. I'm delighted to welcome you to the new episode of “In Your Interest!”. Today, October 10, is World Mental Health Day. We're going to tackle this crucial topic that affects so many people around the world, talking about financial stress and mental health. Sébastien and I are joined today by our colleague Jessica Poirier, Global Health Advisor, who’s joining us from Gaspésie. Hi, Jessica.

Jessica: Hi, Sébastien and Ashleay!

Sébastien: You’re our first remote guest, so thanks for being a pioneer here on the podcast.

Jessica: Well, thank you for having me. I feel quite lucky to be the first one. Happy World Mental Health Day to the both of you! Speaking of mental health, did you know that, worldwide, there are nearly a billion people living with a mental health problem? So obviously many factors and events, some beyond our control, impact our lives and our mental and physical health. This includes the economic situation that we've been facing for some time now, which is causing significant financial stress within the population.

Sébastien: No, these have been peculiar times. With the pandemic, people were worried about losing their jobs, the economy never opening again, and now inflation is taking a bite out of the budget for groceries and gasoline and all of that. So, yes, this is a very peculiar time for financial stress and the link to wellbeing.

Ashleay: Indeed. And we're hearing more and more about financial stress. So how common is it, Jessica?

Jessica: Well, I'm a numbers person and from what I can tell from listening to your podcast, I'm pretty sure you two are as well.

Sébastien and Ashleay: Yep!

Jessica: I feel that! So, I’ll share a few stats that I read recently in this June’s “2023 Financial Stress Index survey,” which is a national survey. It mentions that money remains the main source of stress for the sixth year in a row. So that’s really something else: the sixth year! Specifically, what they report in this survey is that 40% of Canadians say that financial worries have affected their sleep and that stress related to personal finances has a negative influence on their performance at work. The survey also mentions that money is their main concern ahead of personal health, relationships and work.

Sébastien: So, money is first, you said about 40%. And then on the side, with personal health, relationships and work, what are the percentages there?

Jessica: Well, personal health is actually second at 23%, relationships are at 17%, and work is at 16%.

Sébastien: So, if you add the second and third causes of stress, you come in just about at the same level as money. Money, then, is by and large the most significant cause of stress.

Jessica: Absolutely. Yep. I’ll share a few last interesting stats from that same survey. It actually indicates that financial stress has had a negative impact on more than half of the Canadian population and that one in three Canadians—36% to be exact—experienced mental health problems such as anxiety and depression as a result of financial stress.

Sébastien: And this is a very important stat because, you know, if you've been listening to our podcast, maybe you’ve been thinking that you’re the only one who doesn’t have a budget, doesn't have their financial situation in order, is feeling some financial stress. The fact is, you're really not alone here; about half the population is feeling the same.

Ashleay: Absolutely. And I imagine that feeling all this stress with the current economic situation is affecting our health.

Jessica: Yes, it is. So, as mentioned a few minutes ago, the current economic situation is reflected in our daily lives. And, as Sébastien mentioned, increasing mortgages, gasoline, grocery costs all create a different source of financial stress within the population. I'm thinking of, you know, whether it’s managing household expenses, dealing with high levels of debt, living paycheck to paycheck, struggling to save money for short- and long-term goals and being unable to cope with unexpected expenses. You'll understand that this financial stress is obviously harmful to our health and wellbeing. In terms of mental health, I think of depression and anxiety, which came up in the survey we just mentioned. There’s also physical health problems like insomnia, headaches, cardiovascular diseases and even weight gain. And the last thing that comes to mind, which is one that we shouldn't underestimate, is the impact of the financial stress that we're feeling on our interpersonal relationships, whether it's with our colleagues, friends or family. Financial stress can lead to increased tension and can impact how we interact with those around us.

Ashleay: And what advice would you give people listening to this podcast to kind of negate these effects?

Jessica: First and foremost, I think the most important thing to remember is that you're not alone in feeling this financial stress and that there are solutions out there to support you. A few tips come to mind, which you can put into practice right away. The most important one is to get help. There's no shame; don't be embarrassed. Whether it's your financial situation or the stress you're feeling, there are experts out there who are there to help you. I'm thinking, for example, of speaking with your financial planner to help you manage your budget or set your financial goals. You can also explore what's available to you through your employer: more and more companies actually have health and wellness teams that will offer programs and services to help and support employees. For example, the Employee and Family Assistance program, which often has a financial aspect to it. And, as I mentioned earlier, speaking of family, it's important to share what you're feeling with those close to you and those around you. If you’re experiencing the increased tension that we mentioned earlier, you shouldn’t hesitate to talk about that stress. Another great tip is to detach yourself from current events. Listening to the news over and over again, reading every word of the newspaper mentioning the economic situation, these habits will definitely lead to stress. A third tip that comes to mind is to get your information from credible sources and professionals.

Sébastien: Yeah, and especially in this world of social media, where the Canadian media isn’t allowed to post on Facebook anymore, where many people find themselves in echo chambers or in forums that can have, let's say, extreme views on certain events or either overly optimistic or pessimistic views on asset classes, returns or markets in general. This can create a lot of stress. So, being picky about what you read, who you listen to, when you listen and how much news you consume… I completely agree, this can go a very long way.

Jessica: Yep. There's definitely a lot of information out there. Before we move on, maybe I can share a few more tips. The fourth one that comes to mind is to focus on what you can control. So obviously, for example, limiting luxury spending if your current financial situation doesn't allow it will help avoid the stress of not being able to meet your current financial obligations. It's also important to limit how often you check your finances. Just a few minutes ago, we were speaking about, you know, checking the newspaper and what we see online, but obviously obsessing about our investments or constantly checking our bank accounts won't help our mental health either. The last tip that comes to my mind is to review your priorities and be realistic. What I mean by being realistic is to set realistic goals that, yes, will still allow you to dream despite the financial pressure. But if you get carried away and set yourself unrealistic goals, it won't help you at all. So, for example, if you set up an emergency fund or a fund for a specific project that you're looking forward to, for example, and if you’re doing an automatic transfer, but spend all your time dipping into it to meet your current financial obligations, you won't see the numbers increase very fast in that account and the project will become discouraging.

Sébastien: Yeah, you want to set yourself up for success. You know, I love the point about limiting the frequency with which you consult your finances or the markets. It’s not because you look at the markets every minute, every hour, every day that it will move your way. You know, the markets will be the markets; sometimes you just got to let it be, sometimes you need to let go. And, you know, thinking about the long-run means that you should, in theory, invest your money and not worry about it.

Jessica: Absolutely. And while these are all great tips to help you manage your financial stress, there's also a few coping strategies that I always like to share to help you take care of yourself in times of stress. These tips won't abolish the financial stress we're feeling, but can definitely help manage it. There's actually two that I often share with people. First, I always mention the importance of physical activity, eating healthy and sleeping well. And there are plenty of free options that won't add to your current financial stress or be demanding on your wallet. What I do, for example, is I'll opt for a daily walk. So, I'll go outside, take a walk and get a breath of fresh air. You can also find free training videos online. So, there are many resources and options out there. Another coping strategy that I think of is practicing relaxation techniques, such as deep breathing, stretching or meditation. Personally, I have a meditation app on my phone, but there are many free options available out there. It's surprising, you'll find so many resources just by doing a quick search online for “two-minute meditation exercises” or “breathing exercises,” for example. So, I do this for a few minutes either when I get up or go to bed, I even squeeze a few minutes in after a difficult meeting at work. It really does a world of good for me. And here I am, you know, talking about my strategies, but Ashley, is there anything that you've been putting into practice that you want to share?

Ashleay: Yeah, absolutely. I definitely agree that a bit less news is, I think, something that really helped me a lot. I'm quite empathetic, so sometimes too much bad news, if you will, isn't great. Another thing is, I used to be very, very spendy, so I kind of tricked myself into, first of all, paying off any kind of fees that had the highest amount of interest and once that was done—that was kind of a main goal—I set up automatic payments toward my savings account. And it's amazing because really you almost don't even notice it going out and—like we’ve discussed in a few other podcasts—it doesn't have to be a huge amount, it just has to be a regular amount. Yeah, so that’s what’s worked for me.

Sébastien: Yeah. So, sound habits go a long way.

Ashleay: There you go, exactly.

Jessica: Absolutely. You know, it’s true what you say: sometimes by just putting a few dollars aside—you won't necessarily notice it—all of a sudden, after X amount of time, you open up that account and, wow, you actually realize that you've saved a lot. So yeah, that's a great idea. And Sébastien, do you have any strategies to cope with your financial stress?

Sébastien: Oh, sure. You know, very early on, as a young adult, I built a budget and stuck to it. And it wasn't always easy, for sure. You know, there's ups and downs in life, but the flip side to the downs is that sometimes being disciplined means that you can reward yourself with a little something. That's also very important. I always say, “everything with moderation, including moderation.” I think that also applies to budgeting. I think you should always have a plan. It’s good to think—not constantly for sure, but say once a year—what are my objectives? Have they changed? Has my situation changed? How can I adjust? You also have to make sure you have financial help. So, you know, it's not because I spend all day in the markets and in portfolios that I don't need the help of a financial advisor. It’s helpful just to have someone who asks you the right questions, makes good suggestions, keeps you on track. We do benefit from that, too. Whether you know a lot or don't know much, having someone there who’s got your back is precious.

Ashleay: Well, thank you so much, Sébastien, for sharing your tips and tricks. And thank you, Jessica, for coming to talk with us today. We learned a ton, once again. And thanks also to our listeners, we'll see you next week. And if you'd like to continue learning more about finances, don't hesitate to subscribe to our podcast. Love this podcast? Want to know more about economic news? Follow “In Your Interest!”, available on all platforms. Visit the Economic News page on ia.ca or follow us on social media.

About

Sébastien has nearly 20 years of experience in the public and private sectors. In addition to his roles as Chief Strategist and Senior Economist, he is an iAGAM portfolio manager and a member of the firm’s Asset Allocation Committee. All of these roles allow him to put his passion for numbers, words, and communication to good use. Sébastien also acts as iA Financial Group’s spokesperson and guest speaker on economic and financial matters. Before joining iA in 2013, he held various economic roles at the Autorité des marchés financiers, Desjardins, and the Québec ministry of finance. He completed a master’s degree and doctoral studies in economics at Laval University and is a CFA charterholder.

Sébastien Mc Mahon and Jessica Poirier

This podcast should not be copied or reproduced. Opinions expressed in this podcast are based on actual market conditions and may change without prior warning. The aim is in no way to make investment recommendations. The forecasts given in this podcast do not guarantee returns and imply risks, uncertainty and assumptions. Although we are comfortable with these assumptions, there is no guarantee that they will be confirmed.

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2024-05-28 08:40 EDT
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