Dan Richards is president of Clientinsights. He is a faculty member in the MBA program at the Rotman School at the University of Toronto.
A year ago, you couldn't pick up the paper without reading about "the new frugality," in which conspicuous consumption (and sometimes consumption of any form) was out and saving was in.
In recent conversations with Canadians, I'm seeing a shift to a fundamentally different mood, one that I call "the new precariousness."
This stems from a growing unease that many of the things people counted on traditionally can't be relied on going forward - it's especially pronounced among people in their forties and fifties.
To be sure, this isn't entirely new. Starting in the 1980s, for example, you could no longer be sure that if you worked for a big company and were getting good performance reviews, your job was safe and you could retire at 60 or 65.
But at least there were other things you could count on. If you had a pension, it would be there in retirement. Provided you had a long-term outlook and the discipline to ride ups and downs, you could be confident of high single-digit returns from the stock market. If your kids went to college or university and worked reasonably hard, a decent job would be waiting for them on graduation.
None of these givens seems to apply any more - and with that comes heightened pessimism about the future. Surveys show this is the first generation of Americans who aren't sure their children will be better off than they are - and many Canadians feel exactly the same way.
A case can be made that these fears will generally be unfounded - the large majority of Canadians will keep their jobs, retire when they want to, receive their pensions and see their children gainfully employed. Further, current valuations suggest that future stock market returns will be in line with historical averages.
That's small comfort, of course, if you're among those affected by an unanticipated negative event or are obsessing over the uncertainties you're facing.
Given today's economic turbulence, company CEOs are putting plans in place to navigate through an increasingly unpredictable world. There are four key principles that Canadians anxious about the future can borrow from these CEOs, in order to be pro-active and take control of their financial futures.
Get a handle on where you stand
Even though last year's market bounce back caused the most extreme concerns to abate, there's still a lot of anxiety. Often the first step is to develop a written plan to document where you stand, where you want to go and to chart a course forward.
You might try to develop this on your own or increase the chances of success by working with a financial adviser; either way, that plan is essential. No successful company would operate without a written plan - and the same should apply to individuals. As the old expression goes, it's fine to have a vision of where you want to go, but a vision without a plan to get there risks being a hallucination.
Build a financial buffer
As part of your plan, make it a priority to create a short-term financial buffer against unforeseen events. For most Canadians, that means going back to having the traditional cash on hand for three months of expenses; this buffer can also be in the form of a secured line of credit available against your house. (As many companies discovered in 2008, the problem with unsecured lines of credit is that they can be cancelled just when you need them.)
This was common wisdom in the 1950s and 1960s - but something that too many Canadians have moved away from. Difficult as it might be when you're barely getting by, failing to have a cash buffer can create huge stress and also leaves you vulnerable to catastrophic consequences from a small blip.
Revisit spending
Third, take a hard look at your spending.
More and more companies have gone to zero-based budgeting, where there are no going in assumptions and simply because you did something last year doesn't mean you'll do it this year.
Just like companies, Canadians need to establish tough-minded budgets that guide spending - whether it be on big things like a new car or vacations, mid-sized purchases like clothes or Friday night dinners out or the small daily expenditures that add up.
Embrace flexibility
More and more companies have moved away from five- and 10-year plans - they still have long-term goals, but given today's uncertainty don't make definitive plans beyond three years.
Many Canadians would benefit from a similar approach. We'll still have long-term goals - but we need more flexibility in the timing of those goals and how we achieve them, regularly modifying plans for our retirement age, post-retirement jobs or discretionary spending based on things like our health and job situation and stock market performance.