On behalf of Sun Life, welcome to this session where we’ll discuss the connection between your health and your wealth.
It’s important to acknowledge and understand that physical, mental and financial wellness is integrated. Mental health and chronic physical disease are not only closely linked they’re actually intertwined. Excess stress, including financial stress, can contribute to chronic physical illness such as high blood pressure, hardening of the arteries, diabetes and obesity, and can also lead to other mental health problems.
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A ven diagram showing Wellness at the centre and Financial, Physical and Mental as the overlapping circles. <End slide>
Financial stress in Canada has reached a tipping point. With rising inflation, basic needs becoming increasingly unaffordable, and overarching economic instability, it’s no wonder why.
FP Canada’s 2024 Financial Stress Index reveals that personal finances, at 44%, is the top stressor for Canadians. The study also shows that keeping your finances healthy can help keep you healthy!
While many of us think of our physical health and can easily understand how our behaviours can both positively and negatively affect it, it may not be as obvious how important factoring physical health into financial planning can be.
Almost half of Canadians have experienced a health event which affected their personal finances. One in three Canadians are experiencing mental health challenges related to financial stress. And 7 in 10 Canadians do not retire as planned, with the number one reason for that being personal health.
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A circle chart. 7 in 10 Canadians do not retire as planned. #1 reason is personal health. Almost 1/2 of Canadians have experienced a health event which affected their personal finances. 1 in 3 Canadians are experiencing mental health challenges related to financial stress. <End slide>
Lifestyle can heavily influence overall health and impact how long we live.
- 1 in 4 adults are considered to be obese
- 4 in 5 do not achieve the recommended 150 minutes of moderate to vigorous physical activity weekly
- 3 in 5 do not eat the recommended daily serving of fruits and vegetables
- And 1 in 4 report high levels of life stress, which can lead to unhealthy lifestyle choices in response
From a financial perspective, we live in an age of instant gratification and available credit. Unhealthy lifestyles can also include money management problems. Money, if not managed well, adds to stress levels, which in turn can affect physical and mental health.
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Source: Chronic Disease Bright Paper 2016 <End slide>
Mental health and financial well-being are two important aspects of our lives that are often viewed in isolation from each other. However, the truth is that these two elements are deeply intertwined and play a crucial role in determining our overall health and happiness.
Stress is a big threat to both our mental health and financial well-being. Stress clouds our judgment and can lead to impulsive decisions that can have damaging consequences on our finances.
Making good financial decisions is harder when our mental health is challenged, as we can be more prone to impulse purchases, not paying bills on time or not setting aside enough money to build up our savings.
The physical tolls of stress, such as insomnia and fatigue, further compound the problem.
And today’s economic climate can pile on an additional layer of stress that can significantly impact our mental health. Struggles to meet expenses and save for the future can evoke feelings of anxiety and depression. Throw in a volatile stock market and the stress can cause even the most seasoned investor to act out of fear.
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Source: https://www.forbes.com/councils/forbesfinancecouncil/2023/03/14/the-connection-between-financial-well-being-and-mental-health/ <End slide>
Self-care is key to both mental and financial well-being. When we take care of our physical and mental health, we can in turn make better financial decisions and manage our finances with greater confidence. Nurturing physical health with exercise, meditation and hobbies can help us reduce stress, improve our focus and maintain our mental and emotional balance. So can cultivating connections with individuals who support and encourage you, as positive relationships play a vital role in human well-being.
From a financial perspective, it’s important to set realistic and achievable financial goals, and regularly track your progress. Celebrate your successes and learn from setbacks. Keep in mind that achieving your desired outcomes might take time but recognizing the interplay between financial well-being and mental and physical health is an important step on the integrated health journey.
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Source: https://woodgundyadvisors.cibc.com/alexandra-stadnyk/blog/33155178-From-Wealth-to-Well-Being-The-Interconnection-Between-Financial-Well-Being-and-Mental-Health <End slide>
There are 3 simple ways you can increase your financial wellness.
First, is having a plan! A financial roadmap is a practical way to boost your financial wellness.
Second, take a moment to reflect on your short, medium and long-term goals. Think of financial wellness as more than just preparing for retirement. Money-related stress is a widespread issue that can affect you both at work and at home, at any point in your career, including the basic tasks of day-to-day budgeting and saving for shorter-term goals.
Lastly, learn as much as you can! A Statistics Canada 2016 report found that only 31% of women and 43% of men consider themselves “financially knowledgeable.” An easy way to increase your knowledge is by attending webinars and watching recordings such as these.
Having regular discussions with your financial planner can also help you build your knowledge.
It’s important for Canadians to save for their retirement but a financial roadmap goes further than that. It looks at finances holistically and considers:
- Money management
- Retirement planning
- Investing, and
- Financial protection.
Let’s take a minute to review some money management tips.
Try to pay yourself first. To do this, make saving a regular part of your budget, just like any other bill. Set up automatic savings through your job or bank to make it easier. Everyone's money situation is different; how much you should save versus paying off debt depends on your income, expenses, and the type of debt you have.
If you don't have one, start building an emergency fund. Aim for 3-6 months of expenses. Even saving $10 or $20 a week helps.
Set up automatic transfers to a separate, easy-to-access account.
It's better to use savings than credit cards or loans for emergencies. Credit cards have high interest rates if you don't pay in full each month. Lines of credit might have lower rates, but you still have to pay them back with interest.
During tough times, it's okay to reduce or pause your savings. Paying bills should come first. When things improve, you can start saving again. Small steps add up. Start where you can and adjust as needed.
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There is no one rule. Some people have a savings plan through their employer. Some people have low-interest debt payments. <End slide>
The sources of retirement income in Canada can include government programs such as Canada Pension Plan, Quebec Pension plan, Old Age Security and the Guaranteed Income Supplement. As these programs are designed to only replace a portion of pre-retirement income, sources of retirement income will also often include company retirement plans, personal savings such as RRSPs, TFSAs and other savings, or assets. Understanding how much income you can expect from each of the sources you’ll be drawing from, and the risks and opportunities associated with each, is an important component to your retirement planning.
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RRSP = Registered Retirement Savings Plan. TFSA = Tax-Free Savings Account. <End slide>
A very basic understanding of how inflation, time and taxes can affect your investing strategy will also help you, as you’ll be able to make better-informed investment choices.
In addition to growing your money, you may also wish to consider protecting it. Life can throw unexpected challenges our way, like serious illness or accidents. These can really hurt your finances if you're not prepared. That's where insurance comes in. It's like a safety net for your family's money.
Life insurance helps your loved ones if something happens to you. It can replace your income and cover expenses.
Health insurance is there for big medical bills. It can help with long-term care or serious illnesses, so you don't have to use up your savings.
Disability insurance gives you some income if you can't work due to illness or injury. This helps keep your family afloat financially.
Remember, insurance isn't just an expense – it's protection for your family's future.
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3 sections. Section 1: Financial protection – Life insurance: Term – protection for short-term needs. Permanent – protection for long-term needs. Section 2: Financial protection – Health insurance: Long-term care, Critical illness, Disability, Health & Dental, Accidental death & dismemberment. Section 3: Financial protection – Other: Property insurance (house, condo, apartment), Vehicle insurance, Emergency account, CPP/QPP disability benefit, Workplace coverage. <End slide>
In summary, how you handle your money matters a lot in life, and it can have impacts on your physical and mental wellness.
We encourage you to check out the various articles, tips, tools and calculators on sunlife.ca. From health & wellness to money and finances, there’s something for everyone.
We also encourage you to consider talking to a financial professional. They can help you to create a balanced and healthy financial roadmap that considers your physical, financial and mental well-being.
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Thank you! The information provided is of a general nature and can not be construed as personal financial or legal advice. Neither Sun Life or its affiliates guarantees the accuracy or completeness of any such information. This information should not be acted on without obtaining counsel from your professional advisors, including a lawyer, notary, tax professional, or financial advisor (registered as Financial Security Advisors in Quebec) as may be applicable to your individual situation. Group Retirement Services are provided by Sun Life Assurance Company of Canada, a member of the Sun Life group of companies. <End slide>