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\n\t\t\t\t<\/p>\n\n\t\t\t\tCanadians dipping into their savings\t\t\t<\/h2>\n<\/p><\/div>\n According to an Ipsos poll conducted exclusively for Global News, 42 per cent of respondents wanted Prime Minister Mark Carney\u2019s federal budget to prioritize helping with the increasing cost of everyday expenses.<\/p>\n
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The latest consumer inflation report showed prices increased an average of 2.2 per cent in October compared to a year earlier, with prices for food bought in stores increasing 3.4 per cent.<\/p>\n
When bank accounts are running low or are empty, some Canadians say they have been leaning on savings or emergency funds for extra cash to pay for bills, groceries and other immediate needs.<\/p>\n
In a survey report from Willful released in October, nearly half of respondents, or 46 per cent, said they had to spend money from their savings to pay for daily expenses. The report also found the average score participants gave to measure how optimistic they were about their finances dropped from 52 per cent in 2024 to 46 per cent this year.<\/p>\n
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Get weekly money news<\/h2>\n Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n
In a Harris Poll survey conducted on behalf of NerdWallet Canada in October of this year, 28 per cent of respondents said they are still paying off debt from the holiday shopping season in 2024, and 22 per cent of Gen Z said they planned to dip into emergency savings to buy holiday gifts this year.<\/p>\n
This also comes after a separate TD Bank survey report from October revealed Gen Z felt more stressed because of their financial situation compared to older age groups.<\/p>\n
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\n\t\t\t\t<\/p>\n\n\t\t\t\tThe risks of withdrawing from savings\t\t\t<\/h2>\n<\/p><\/div>\n Some financial experts recommend against taking money out of a savings or other long-term investment account too soon, as this could mean sacrificing long-term financial goals.<\/p>\n
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\u201cDipping into your savings, especially your long-term retirement accounts, it\u2019s probably not the best idea,\u201d says Michael Lehmann, an associate portfolio manager and client relationship manager with Brook Wagman Private Wealth at Raymond James.<\/p>\n
\u201cAnytime you take out money that\u2019s going to accrue interest and performance over the long term, you\u2019re missing out on those future gains.\u201d<\/p>\n
Lehmann goes on to describe the positive \u201ccompounding\u201d effects of these accounts that can be cashed out later in life, like when someone retires.<\/p>\n
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\n\t\t\tMore on Lifestyle<\/button>More videos<\/button>\n\t\t<\/p>\n<\/p><\/div>\n\u201cYou don\u2019t want to treat your stock market portfolio like an ATM, especially if it\u2019s set up for the long term.\u201d<\/p>\n
Most savings accounts and investment funds grow in value by compounding interest, which means the longer the money is invested, the more and faster it grows \u2014 like a snowball effect.<\/p>\n
If someone does need to withdraw from their investments to pay for basic needs, Moorhouse says it\u2019s important to get one\u2019s savings back on track fast.<\/p>\n\n\n\t\tTrending Now<\/span>\n\t<\/p>\n\n\n\n\t\t\t\t\t\t
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\n\t\t\t\t\tGuilbeault won\u2019t resign from Cabinet over pipeline deal, government source says<\/span>\n\t\t\t<\/p>\n<\/p><\/div>\n<\/li>\n\n\n\t\t\t\t\t\t
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\n\t\t\t\t\tCanada launches new alert system to protect people in extreme weather<\/span>\n\t\t\t<\/p>\n<\/p><\/div>\n<\/li>\n<\/ul>\n<\/section>\n\u201cIt makes sense to dip into savings when there is some sort of gap in terms of what you owe and money coming in, and that\u2019s how you\u2019re going to pay those bills instead of going into debt. However, the problem is, how are we going to replenish those savings?\u201d says Moorhouse.<\/p>\n
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\u201cThe whole point of an emergency fund is to get it to a certain point and then you can reallocate that savings towards another goal, say retirement or a home down payment.\u201d<\/p>\n
In more extreme circumstances, assets like a car, jewelry, a house, or investments like stocks and mutual funds can be sold or liquidated for extra cash to pay for immediate needs, which Moorhouse also advises against doing.<\/p>\n
\u201cDoing something extreme like selling your car, putting your house up for sale or liquidating your retirement savings is always the last resort if there\u2019s really no other option, and usually there are other options before touching those things that you worked so hard to build,<\/em>\u201d says Moorhouse.<\/p>\nShe goes on to suggest other ways consumers can find some breathing room in these \u201cextreme\u201d circumstances, including credit card balance transfers, consolidating debt and working with a credit counsellor. She also suggests working with an insolvency trustee to file a consumer proposal, which, if approved, can potentially give more flexibility to those in debt.<\/p>\n
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\n\t\t\t\t<\/p>\n\n\t\t\t\tMore than just money at risk\t\t\t<\/h2>\n<\/p><\/div>\n Financial challenges can also cause added stress, which can pose risks to one\u2019s mental and physical health, Toronto Metropolitan University psychology professor Dr. Martin Antony said.<\/p>\n
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\u201cIt doesn\u2019t surprise me to learn that people are struggling right now. People are, as always seems to be the case, being asked to do more with less, and that creates challenges for people and is stressful for people,\u201d Antony said.<\/p>\n
\u201cWhen there\u2019s a mismatch between our goals and our values and things that we want to do and what we\u2019re able to do, that stresses us. When we\u2019re stressed in that kind of way, we\u2019re more likely to experience irritability and anger at others.\u201d<\/p>\n
Antony says stress can cause some people physical symptoms, including headaches, increased blood pressure and various kinds of aches and pains, in addition to emotional symptoms from feelings of anger or irritability, as well as sadness or even depression.<\/p>\n
When it comes to money, though, Antony says the \u201cstresses\u201d can sometimes extend to the relationships of the affected people.<\/p>\n
\u201cMoney stresses in particular have an impact on relationships. It\u2019s different if I have a health issue that might be stressful for me and I might be a little bit more irritable but it doesn\u2019t directly impact on someone else, whereas if I\u2019m spending the family\u2019s money, that does directly impact somebody else.\u201d<\/p>\n
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