Having a whack of money in a savings account is smart personal finance, and not just in a pandemic.

But let’s not oversell the benefits. A cash cushion will help your finances, but not necessarily your stress level.

The Canadian Payroll Association’s 12th annual Survey of Working Canadians has detected a bizarre contradiction – increased savings levels have left us more financially stable, but we are much more worried about money.

“COVID has derailed the traditional factors impacting financial stress,” said Peter Tzanetakis, president of the payroll association. “People are overwhelmed by uncertainty, even though their bank accounts are healthier today.”

The survey of 4,264 people found that the share of participants living paycheque to paycheque fell from 43 per cent last year to 37 per cent, the lowest level ever found in the survey. Sixty-two per cent said they were able to save at least 5 per cent of their paycheque, up from 59 per cent in 2019. “Working Canadians are actually better off financially because they were essentially forced to save by the lockdown,” Mr. Tzanetakis said.

Physical distancing has slashed spending on things such as daycare, commuting costs, leisure travel, entertainment and dining out. The savings for those fortunate enough to have maintained their jobs and income have been tremendous – a total of $127-billion was parked in bank deposits in the first half of the year, roughly four times the average amount for the same slice of the previous few years.

If you’re a saver, you have done well. Having readily accessible cash is your best defence against economic disruptions resulting from efforts to manage the spread of COVID-19 in the pandemic through the fall and winter. Yes, this applies even with today’s low interest rates.

Mr. Tzanetakis said having savings to cover an emergency is normally a financial stress-reducer, along with being in a position to spend less than you’re making. But not in the era of COVID-19.

The CPA survey divides participants into three groups – financially stressed, financially coping and financially comfortable. In the latest survey, 43 per cent said they are financially stressed and 22 per cent described themselves as comfortable. From 2009 through 2019, it was typical to see one-third in both of these categories.

What’s happening here is that fear of the unknown is ruining the peace of mind we normally get from having lots of money in a savings account. The CPA survey lays out our financial fears as follows:

• Roughly two-thirds of all workers are anxious about a recession, and nearly half believe their companies will lay people off in the future.
• 62 per cent of those considered to be financially comfortable were worried about inflation.
• 52 per cent of stressed workers are nervous about retirement.

Here are some reassuring thoughts for those who have saved money during the pandemic and are still worried. If inflation is such a concern, why have central banks been hammering away at the theme that low rates will be with us for a while? On retirement, strong financial markets have repaired a lot of the damage from earlier in the year. This kind of resilience offers hope if there’s another decline for stocks.

As for recession, the federal government and provinces seem committed to spending what it takes to support economic activity. If that spending scares you because it contributes to government deficits, you have to ask yourself if a deep recession or depression would be worse for the country.

Something else you can do to help your stress levels about money is to talk to someone, whether it’s for advice or reassurance. There are fee-for-service financial planners who will spend an hour or so with you to answer a specific question. They charge an hourly or flat rate, which keeps your conversation from straying into the sale of fee-generating investment products or advice.

Non-profit credit counselling agencies can help if your debts are getting the better of you. If a friend or relative is good with money, ask them. I’m happy to try and help – rcarrick@globeandmail.com, or send me a direct message on Twitter.

Given the uncertainty about the pandemic, it’s a done deal that the months ahead will be stressful in all kinds of ways. Having money sitting in savings account may not make you feel better about that, but it’s still a huge asset in every sense of the word.

ROB CARRICK
PERSONAL FINANCE COLUMNIST
The Globe and Mail, September 21, 2020