When it comes to the economy, you will agree that it is rather risky to play the role of forecaster. History has shown us quite often that experts, even the most convinced, can be strangely surprised by events. I therefore avoid futurology, as much as possible.
But since I have to respect the imposed theme here “what will not happen in 2024”, I am going to jump on the ice, as we do in improvisation leagues. Without falling into fiction, reality is quite rich in subjects.
A recent TD Bank survey told us that 53% of Quebecers have not contributed to their investments in 2023. This is certainly not an ideal situation, but what especially caught my attention is that this is the highest rate in the country. In the other provinces, the average is 45.8%.
It’s always fascinating to see how different Quebecers are when it comes to personal finances. In polls and studies, the differences are significant with the rest of the country. Whether it’s about savings, attitude towards money or behavior. In Quebec, we are always more carefree, more confident, less foresighted, in short.
Another example: 57% of Canadians feared over the summer that they would not be able to repay their mortgage or pay their rent. In Quebec ? Only 34% of households felt this fear, according to a Léger survey.
Banks, operating from coast to coast, are well placed to observe the differences.
“It is common practice in other provinces to do an annual update with your financial advisor. It’s like going to the dentist for a cleaning every six or twelve months, there’s more regularity,” Émile Khayat, senior regional director at TD Wealth Management, told me.
In Quebec, people go to the branch less to plan, more for a specific need such as contributing to their RRSP or taking out a loan. The level of discipline is simply not the same, and that will not change in 2024, despite the economic situation, mortgage rates and the increase in the unemployment rate. It’s too much in the DNA.
The comparison with the dentist clearly illustrates the contrast between French speakers and English speakers, according to Jean-Marc Léger, economist, co-founder of the Léger firm and co-author of the book. The Quebec Code. After decades of analyzing in depth the humans who live in Canada, he no longer has any doubt: the relationship with money is a “key difference” between the two solitudes.
“The most important factor is the fact that Quebecers are in a here and now dynamic, while the English-speaking community is preparing for the future. Quebecers are very short-term in their planning. »
When it comes to charitable donations, for example, 80% of English speakers know how much they will give over the course of a year. It’s in their budget. Only 20% of Quebecers adopt this behavior. “Here, we tell ourselves that we are going to give when they come after us! », says Jean-Marc Léger, laughing.
The same goes for retirement. English Canadians are saving for their old age, while the main concern of French-speakers who contribute to their RRSP is to save taxes next year, reports the pollster. As soon as a child is born, he continues, English speakers will wonder which university he will attend and start saving. A fairly rare concern in Quebec.
Having a precise action plan is the equivalent of searching on Google Maps before jumping in your car to go somewhere. Knowing your route, traffic conditions and arrival time in advance helps reduce stress.
A simple overview of one’s financial situation, even if it is precarious, also reduces pressure. “Clearly understanding your current income and expenses and creating a financial plan for the future can provide a feeling of control,” summarizes mentalhealthstrategies.com. Numerous studies show that people with a plan are less anxious, especially when the stock market declines.
The other great advantage of financial planning is that the process leads to reflection. Moreover, Émile Khayat, from TD, believes that his work is “more psychological than technical”, since it asks a lot of questions.
Of course, you have to find the right person, the one with whom you will be comfortable talking about money without feeling judged. The turnover rate in branches means, unfortunately, that it is not always possible to develop a bond of trust with an experienced advisor. We must also get over our fear of not understanding all the financial jargon, and put into perspective the risk of coming across a person who just wants to sell their products without considering our real needs.
I don’t believe human nature can change overnight, but with effort we can all adopt new behaviors for our own good.
Suggested resolution for 2024: improve your financial literacy.