By Sheryl Smolkin
Read this article and comments at Moneyville.ca
A report by a firm that provides employee assistance programs reveals that in the last year the number of people using these services for debt and credit counseling has increased significantly.
Morneau Sheppell’s analysis shows that 60 per cent of employees who contacted their plan for a financial reason in 2010 did so for debt and credit help, up from about 50 per cent in 2009.
EAPs are benefit programs offered by most large employers and many smaller ones, typically in conjunction with a health insurance plan. They are intended to help employees deal with personal problems that might adversely impact their work performance, health, and well-being.
Morneau Shepell executive vice president Karen Seward is not surprised that so many employees are seeking help to cope with their debt levels. “Interest rates are low. People are able to take on more debt. But if they lose their job or their working hours are reduced that debt ratio can quickly become overwhelming.”
Because depression or other mental illness and financial problems often go hand in hand, debt or credit counseling is typically a core EAP offering. Financial advisors work to help them to sort out financial problems and any underlying mental health conditions.
“If you are going to support someone in resolving mental health issues, you have to help them deal with the root of the problem,” Seward says.
An RBC debt poll reveals that age and anxiety levels are closely-linked when it comes to Canadian opinions on debt, with anxiety about debt highest (39 per cent) among Canadians aged 18-34. This level drops by to 21 per cent among Canadians 55 and over.
Family composition is also a key factor affecting attitudes on debt, as Canadians with children were more likely to change vacation plans, avoid buying an expensive item or delay the purchase of a home.
Employees who do not have access to an EAP can look to their financial institutions for advice and resources to help them better organize their money. For example, the RBC advice centre offers interactive tools and calculators that provide customized information covering all facets of saving and using credit.