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The study shows income volatility is more likely to be experienced by part-time, self-employed, seasonal workers and the unemployed. The top three causes of fluctuation in month-to-month income were irregular hourly pay (28 per cent), multiple sources of variable income (19 per cent) and self-employment (18 per cent).

Masrani said his bank is trying to lead. It has a lot of part-time workers, but estimates 90 per cent of those employees qualify for benefits. “You have to adjust to the new reality. You are going to have a lot of folks that are part-time,” he said.

By using reported behaviours and perception when it comes to saving, spending, borrowing, and financial planning the report attempts to gauge the overall financial health of Canadians. In all four categories, those with higher income volatility show significantly lower financial health.

When it comes to savings, the survey found 44 per cent of Canadians with high levels of volatility show low financial health versus 28 per cent of those with low levels of income volatility. As for financial planning, Canadians with high levels of income volatility are almost twice as likely — at 34 per cent to 18 per cent — to show low financial health than those with low levels of income volatility.

The survey also found respondents experiencing moderate to high levels of income volatility were more likely to delay buying groceries, paying down a minimum amount on a credit card or paying off monthly bills. Those with high level of income volatility are twice as likely to feel stressed about their personal finances as those with low amounts of income volatility.

In a lunchtime speech in Toronto, Mulholland emphasized that financial education alone will not solve the problem of income volatility.

“The transformation of our labour markets over the past 30 years not people’s individuals poor financial behaviour (are driving the economic circumstance some face),” she said. “Low income people actually are quite good money managers. You can’t plan, if you don’t know how much money is coming in the door.”

Financial Post

gmarr@postmedia.com

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