Just saw a presentation on findings of a market research – Canadian Financial Fitness 2022 conducted by Environics for Accredit Financial Counsellor Canada. Very insightful indeed. Please do check it out.
The research polled people by how they feel about their financial situations rather than external factors such as income or education level. This is call psychographic profile which is supposed to be more accurate than external labels.
When it comes to personal finance, we can find a next-door millionaire who is a plumber. We can also find a doctor or lawyer who is heavily in debt due to overspending. How much money one earns is surely important, but how he or she manages it is even more important.
This research divided the people into 5 groups based on how good they feel about their finances. The lowest level is labelled the “alert” group who can’t paying their bills or already in debt. It dives into the mindset of the alert group.
- Fatalism: no ability to influence one’s own life. I am afraid that their mindsets could be somehow shaped by their circumstances or what life dealt them too. Perhaps I am a bit fatalistic. 😊
- Aimlessness: feel hard to find meaning or purpose in life. Pandemics worsen it.
- Aversion to change/complexity: feel intimidated by technology changes and complexity of the financial world.
- Need to escape from the current difficulties: understandably so. I would feel this way if I am in their shoes.
- Joy of consumption: retail therapy. I am afraid that this might be one of the causes for their falling into this situation. If one knows how to enjoy life with minimum cost, they will less likely get into financial problems.
- Brand apathy: They do not chase luxury brands.
- Rejection of authority: Because their lives are difficult, they question the integrity of authorities or the fairness of the rules. They feel that they have been treated unfairly by society.
- Vitality: low energy probably due to lack of hope. They feel discouraged by the sense of difficulties.
- Many of them suffer from mental illness. I guessed this might be the cause. However, the financial difficulties can cause mental illness. It can be either way around.
The research does show that this “alert” group has lowest educational and income level relatively speaking. That is not surprising. Education level does influence income and income is certainly a key factor in financial fitness. I think the research is trying to say there is something most of us can do to improve our personal finance.
Worthfy Financial Literacy Counselling 