Anna is a behavioural analyst at Canvas8. Her background in journalism spurred her interest in the intersection of power, identity, and media. She has a master’s in Gender, Media and Culture from The London School of Economics, where she researched media representation and diversity. Outside of work she can be found gardening, taking too many photos, or endlessly trying to crochet the same scarf.

People are looking for a visceral reprieve from the permacrisis

Essential Escapism

‘What is TFSA?’, ‘How do I save for retirement?’, ‘How exactly does inflation work?’ These are the opening questions in a 60-second ad spot from Canadian Imperial Bank of Commerce, that illustrates the bank’s latest campaign aimed at reducing money stress. The campaign features ‘‘financial stress companions’ – a one-off experiment where the bank enlisted the help of therapy dogs to keep people company while they talk about something many of us don’t like to discuss: money. [

(January 2023)] The experiment captured the reaction of some customers as they met their furry friends, who then comforted them throughout the duration of their meeting.

Anxiety in this arena isn’t uncommon. In fact, people are so averse to talking about money that Gen Zers would 

 their sex lives than go into detail about their debt or financial wrongdoings. Look no further for proof of people’s insecurity around their finances than the burgeoning financial influencer boom on TikTok. [

 (February 2023)] While personal finance advice is awash on the internet, unfortunately it won’t help if you’re too scared to follow through and track the budget you’ve made. And often, the root cause of that behaviour is financial anxiety. A survey in Northern Ireland found that nearly half of respondents were worried about their finances, increasingly so among younger generations. [

(November 2022)] “Financial anxiety at the ripe age of 23,” quipped one user on 

But how does one reduce that anxiety? Is knowledge, in the form of financial literacy, the power so many need to take control of their spending? “Financial stress has predated the contemporary financial inflation that we’ve been experiencing in the last year,” says Professor Gilles Gignac, a psychology professor who researches financial anxiety and intelligence. “People have been experiencing financial stress since we’ve been measuring it.” While financial literacy and anxiety are not new ideas, they are incredibly timely. As inflation and global instability makes consumers question the true value of their money, these concepts can feel abstract and out of reach for many. Canvas8 spoke with Professor Gilles Gignac to better understand financial anxiety and connection to financial literacy.

Why is this topic important to understand?

If you speak to people at barbecues and social occasions and with your friends more closely, a lot of people will probably admit that they’re under a certain amount of financial stress. They’ve got bills coming in and with inflation quite high, financial stress is being experienced by a large number of people in many countries. However, not everyone is under stress, some people are actually doing just fine. So the question is: what predicts that? Why are some people doing so much better than other people when it comes to financial stress?

A lot of people think it has to do with the amount of money people make, but that isn’t it. There are a lot of people who earn a significant amount of money who are still under a high amount of financial stress, and conversely there people who do not earn a huge amount of money are actually doing just fine. Someone can earn a lot of money and they’re still worried about the bill that’s coming in. They have two extra zeros on their mortgages and they’re worried. On average, people do not have good financial literacy. There are many studies showing that across age groups, people struggle to answer about half of the questions on financial literacy tests even though they’re considered very basic in the field of finance. And all in all, people are afraid, and if you watch the news, many have good reason to be fearful.

We still debate today, whether financial literacy training programs actually help people. And if they do work, is it just a small thing or does it have a long-lasting effect on their lives? My study took a step back in this debate and asked the question: is it even possible for them to work? In order to find that out, we have to know if intelligence and financial literacy are strongly correlated. If financial literacy could be shown to predict financial anxiety above and beyond intelligence, then there was a possibility for financial training to potentially impact people’s lives.

I did research for many years on intelligence. Things like understanding people’s abilities to reason with information, accumulate knowledge, and short-term memory – the classic cognitive abilities. And then I came across this idea called financial literacy that I had not seen in my own field of intelligence and as I read about it I thought that it sounded a lot like intelligence, but almost nobody was looking at it as an intelligence test. What was surprising was just how little research there was on financial literacy and financial anxiety, even though the two concepts are so closely related conceptually.


So, we engaged with an online panel with members of the public and they got links on their computers to multiple tests. One measures intelligence, one measures financial literacy, and one measures financial anxiety. For financial literacy, we asked about terms and situations that we would consider to be relatively pervasive throughout most people’s lives. And a lot of people get these questions wrong. And for financial anxiety, we asked people the extent to which they were worried about their finances.

Intelligence is definitely correlated with financial literacy. It’s not a big correlation, nor a small one. We can’t say that they are entirely dependent on one another. And that’s an important finding. If we had found that financial literacy was solely a form of intelligence that would have implications because we know it’s very difficult to increase genuine intelligence with training. But because we found there’s not a huge correlation either way, it shows that there is evidence that financial literacy can be improved with training. In sum, financial literacy can be a predictor for financial anxiety, totally independent of intelligence.


This means that learning more about financial terms and concepts can help to reduce anxious feelings around money, no matter the level of intelligence. But on the flip side, intelligence doesn’t predict financial anxiety independent of financial literacy. This means that the smarter someone is, it doesn’t necessarily mean they’re going to be less financially anxious. But I would say that you have to develop programs with the fact in mind that people with higher levels of intelligence may more readily grasp financial literacy concepts. And people with lower intelligence may need more time, more examples.


But the main goal isn’t to just increase people’s knowledge about financial terms and concepts. We actually want them to make better decisions that will lower their financial anxiety. Just because someone knows that paying off their credit card in full at the end of the month is a good strategy doesn’t mean they’ll do it. Especially if they have financial impulse control issues. But think of the analogy of going to the gym. Some people need a training program and a coach to help them to stay motivated and hit their goals, and other people go three times a week all on their own and they’re just fine. But those people are in the minority. And when it comes to financial literacy and wellbeing, my hunch is that people need the ongoing support akin to a personal trainer.


This is a big reason why many financial literacy training programs don’t have huge impacts on people’s lives: there’s so much more psychology to it all. And so while we found that there is a significant intelligence component to financial literacy, it isn’t entirely dependent, which means that this training can work. We want these programs to have an impact on people’s lives.

Prioritise empathy alongside tangible solutions

In some cases, financial anxiety can be treated by an acknowledgement of feelings and an understanding that ‘you’re not alone’. Yet with conversation about money considered ‘taboo’ by 56% of Americans – with 28% of people saying they’d prefer to sit in two hours of traffic than discuss their financial issues – there’s little in the way of water cooler chat when it comes to people’s finances. [

 (2022)] For financial brands, demonstrating empathy in communication is key – indeed, brands across all sectors that showcase emotional intelligence have been shown to outperform stock markets. [

(June 2022)] Perhaps the biggest opportunity here for banks is within the homeownership space. With 

 describing the process as ‘the most stressful event in modern life’, there’s a need for brands to better acknowledge these stressors and find more innovative ways to reduce this anxiety.

Empower with meaningful education in-situ

While education on money matters can help reduce feelings of financial anxiety, the type of education might differ from person to person. Indeed, generational divides are apparent, as are gender differences. [

 (April 2022)] Women are more likely than men to lack confidence in their financial knowledge – which can be inaccurately attributed to a lack of knowledge. Their study found that “women tend to disproportionately respond ‘do not know’ to questions measuring financial knowledge, but when this response option is unavailable, they often choose the correct answer”. [

 (March 2021)] This presents an opportunity not just for education, but empowerment too. 

 aims to do just this through its community-focused digital platform, IRL meet-ups, online workshops, boot camps, and festivals, while French fintech company 

 similarly empowers Gen Zers with access to basic financial information and more transparent communication around values.

Make solutions that are accessible for all, not just a few

With research pointing to a clear connection between financial worries and psychological distress, education programs are a key part of equipping future generations with the right knowledge to make informed decisions. [

(February 2022)] It’s why we’re seeing more education programs filter into schools. By way of example, teachers in Vermont are pushing for financial education in schools, even partnering with community colleges to offer college credit through courses. [

 (March 2023)] Taking into account varied learning styles, one financial literacy program, Bite of Reality, creates an immersive experience for students that allows them to simulate real-life decisions, with credit scores, bills, and financial choices. [

(March 2023)] But as studies show both banks and consumers overestimate their financial literacy, it’s critical they operate in a way that is accessible for all, not just a select few. [

 (March 2023)] And with more than 80% of Americans aged 18 to 41 admitting they’ve sought financial advice online, there’s a clear need for streamlined and simple solutions from professionals. [

 (March 2023)] “When we create tests for the general population we try to avoid using language beyond the eighth grade level, and that’s something financial literacy programs and brands in the space should also keep in mind,” says Professor Gignac.

 of people say they’d prefer to sit in two hours of traffic than discuss their financial issues

 of Americans aged 18 to 41 have gotten financial advice from social media 

 of respondents were worried about their finances 

Learning about financial concepts and strategies is a proven way to reduce anxiety around money, but there are caveats

A lack of trust and credibility from financial institutions is causing increased levels of financial anxiety among consumers who aren’t sure where to turn

Rather than one-off financial literacy programs, many consumers may require ongoing support and guidance to keep their finances on track

Gilles Gignac teaches psychology at the University of Western Australia. His research focuses on individual differences, mainly regarding intelligence and its variations among people. He has written numerous academic texts on topics ranging from misinformation to memory and emotional intelligence.

United Kingdom

United States

Money

Little Black Book

National Public Radio

Mental Health Foundation

Performance Marketing World

Investopedia

GFLEC

National Library of Medicine

Manchester Journal

The Acorn

FT Advisor

Forbes

Recession uncertainty is making people feel stressed about money. As people seek support, research has found that financial literacy plays a role in predicting these anxious behaviours. Canvas8 spoke to psychology Professor Gilles Gignac to learn more.