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TD Financial Health Index Finds 4 in 10 Canadians are Financially Struggling: New Report Features Insights from Over 10,000 Canadians Across Demographics and Regions
- Earning power doesn't automatically lead to better financial health
- Canadians are reluctant to seek advice or even talk about money
- Link between financial health and physical and mental well-being
TORONTO, Oct. 29, 2019 /CNW/ - Today, TD Bank Group unveiled the TD Financial Health Index, a national benchmarking survey providing a portrait of Canadians' financial well-being and a holistic look at how Canadians are managing their personal finances.
The study reveals that while just over a quarter of Canadians surveyed are "financially healthy," 4 in 10 Canadians are struggling with some or all aspects of their finances. Findings from the survey reinforced the need to significantly enhance financial education to arm Canadians with the knowledge and actions they need to overcome their current challenges and thrive in the future.
"Most Canadians are still unsure about what to do, where to turn and even what questions to ask when it comes to seeking financial advice and information," said Teri Currie, Group Head, Canadian Personal Banking at TD. "Insights from the TD Financial Health Index into the financial well-being of Canadians will help us create better tools, programs and advice for the many Canadians who continue to struggle with a lack of financial confidence."
Working with Ipsos and based on responses from more than 10,000 Canadians, the TD Financial Health Index provides key insights into the complex state of Canadians' financial health according to how individuals spend, save, borrow and plan.
- Individual and household financial behaviours documented in the report depict a gap in both financial health and literacy.
- Income alone is not the sole driver of financial health and traditional definitions of poverty do not provide an accurate picture of the current financial state of Canadian households. An individual can be financially vulnerable despite having a higher income and low debt, as the two do not necessarily equate to having good financial health.
- Many Canadians are not confident that they are on track to meet their long-term financial goals, and 62 per cent don't know where or who to turn to for financial advice, exacerbating the lack of confidence in one's financial health.
- There appears to be a link between financial health and one's physical and mental health. Additionally, those who are "financially vulnerable" score lower on mental health measures.
- The financially vulnerable are more likely to manage their finances themselves or not consult any resources to learn about financial products and services, whereas the financially healthy are more likely to make use of financial advisors, online resources, and info sessions.
The TD Financial Health Index was designed to help shed light on the financial conditions of Canadians particularly as they relate to specific sub-groups. Key findings include:
- Those who identify as LGBTQ2+ are on average, more likely to be financially vulnerable (20 per cent) or financially coping low (30 per cent). Within the LGBTQ2+ community, transgender women have the lowest financial health.
- On average, women have lower reported financial health than men, particularly amongst younger cohorts. Women are less likely than men to feel confident in their ability to meet their long-term savings goals (41 per cent vs. 49 per cent), are less likely than men to have a high annual income (22 per cent of men vs. 18 per cent of women make $100,000+ a year), and are more likely than men to be employed part-time (11 per cent vs. 8 per cent). Furthermore, 3 in 10 women underestimate their financial situation.
- Those who identify as a person with a disability have lower financial health than those who do not, and those with developmental disabilities and memory problems are affected the most. People with disabilities are more likely to live pay cheque to pay cheque and 4 in 10 will miss paying bills on time.
- Unsurprisingly, when it comes to financial health, Boomers are far ahead of all other generations. Interestingly however, even 18 per cent of individuals with a high annual income ($150,000 +) have below-average financial health, suggesting that a higher income does not always translate to good financial habits.
The TD Financial Health Index also looked at key regional and community differences across Canada. Key findings include:
- When it comes to financial health, Quebec is the "healthiest" province (with an overall score of 67.1 out of 100), while Alberta lags behind (with an overall score of 61.5 out of 100).
- Although those living in cities have higher financial health than those living in rural areas, there is still a large amount of variation within Canada's cities. Among city dwellers, those in Quebec City and Halifax have the highest financial health (with an overall score of 70.7 and 67.6 out of 100, respectively), whereas those in Windsor and Kitchener-Waterloo have the lowest (with an overall score of 57.1 and 59.6 out of 100, respectively).
"Asking for help when it comes to money is a critical step towards financial confidence," says Rina DeGrazia, VP Financial Education. "Let's remove the stigma around money conversations and tell Canadians that there are no dumb questions when it comes your finances."
DeGrazia adds that a range of in-person and self-serve resources are available to navigate your financial needs, including a mix of digital, phone and in-branch interactions to assess your situation and help reach your goals. "For example, you may enjoy the convenience of using TD MySpend to track your daily spending and saving, and then want to come in for a face-to-face conversation to discuss your larger financial plan."
Commitment to Financial Education
TD provides advice, tools and programs aimed at helping Canadians live their lives with greater financial confidence.
- Through its global corporate citizenship platform, The Ready Commitment, TD funds a wide-range of educational initiatives that work closely with individuals and communities to help raise financial literacy levels across North America.
- TD colleagues help deliver financial education programs in many communities, such as Money Matters and Your Money.
- TD MySpend is a mobile money management app that helps you track your purchases and transactions made from your personal TD Canadian dollar savings, chequing and credit card accounts and automatically groups them into categories, so you know exactly where your money is going.
- TD colleagues are available in our over 1,100 branches across the country to help provide personalized financial assessments and help customers reach their financial goals.
- The TD Newsroom provides a range of information about personal finances, budgeting and fraud prevention.
Based on learnings from the TD Financial Health Index, TD will launch a new financial education series later this year. The program will deliver foundational financial literacy skills like budgeting and saving, giving Canadians the opportunity to enhance their financial know-how, in-person, from a TD Advisor in their community. For additional findings on financial health in Canada, please view the complete TD Financial Health Index at newsroom.td.com.
About the TD Financial Health Index
Based on the Financial Health Network's FinHealth Score™ and adapted to a Canadian context, the TD Financial Health Index relies on eight indicators of financial health, two in each of four categories (spend, save, borrow, and plan). From these indicators, a Financial Health Score can be calculated, which is a score that runs from 0-100. Those with scores from 0-39 are financially vulnerable. Those with scores from 40-59 are financially coping (low), and those with scores from 60-79 are financially coping (high). Those with scores of 80-100 are considered financially healthy.
About TD Bank Group
The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Groupe ("TD" or the "Bank"). TD is the fifth largest bank in North America by branches and serves over 26 million customers in three key businesses operating in a number of locations in financial centres around the globe: Canadian Retail, including TD Canada Trust, TD Auto Finance Canada, TD Wealth (Canada), TD Direct Investing, and TD Insurance; U.S. Retail, including TD Bank, America's Most Convenient Bank®, TD Auto Finance U.S., TD Wealth (U.S.), and the Bank's investment in TD Ameritrade; and Wholesale Banking, including TD Securities. TD also ranks among the world's leading online financial services firms, with more than 13 million active online and mobile customers. TD had CDN$1.4 trillion in assets on July 31, 2019. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.
SOURCE TD Bank Group
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