Money matters make Canadians cringe

Many Canadians are worried about their personal finances and do not understand important financial concepts, according to a poll conducted by Harris/Decima for BMO Financial Group.

Nearly half (46%) of all respondents reported feelings of anxiety when confronted with their finances. Those feelings subside slightly as incomes rise, but even among those with a household income over $100,000, more than one-third said they had lost sleep worrying about money.

The single greatest concern regarded retirement, with 43% worrying they would not have “enough” money to fund their post-work years. Spending beyond one’s means was the second most frequently cited concern, at 20%.

Only one-quarter of respondents said they felt completely fluent in money matters, with 71% admitting they needed help understanding their finances. And 51% said financial institutions were only making matters more complicated.

“The fact that people are anxious about money shows there’s a need for more clarity,” says Sherry Cooper, chief economist, BMO Financial. “There is a real opportunity for financial institutions to help Canadians better understand money matters, which can ease some of these anxieties.”

Given that just thinking about their finances causes anxiety among so many, it should come as no surprise that 46% are least comfortable talking about money — preferring religion or politics as a topic — especially among non-family members.

At home, however, Canadians open up a little more. Seventy-six percent of parents said they talk about money with their kids.

“Helping kids to understand money and make sensible financial decisions today and in the future is a great opportunity for parents, educators and financial institutions,” says Cooper.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com

(08/06/08)