Canadians millennials doing financially better than American counterparts
Canadian millennials: we have some good news! Even though you may feel like you are gaining traction in today’s tough economy and the job market is a challenge, a new report shows that you’re doing well, especially if you reside north of the border.
A recent report from TD Economics comparing Canadian millennials (aged 25-34) to their counterparts in the U.S. includes the following highlights:
- Canadian millennials are coming out ahead in the three major factors that shape the economy: the labour market, homeownership and net wealth
- The high employment rate for young women in Canada is a positive force, reaching record highs
- The labour and housing markets in Canada are healthier, which has been to the advantage of millennials
“The millennial generation has faced some tough challenges, especially in the late 2000s during the global economic slowdown. A few years later, employment and net worth with this group is growing. Unfortunately, there is heavy debt usage in this demographic as well, particularly when it comes to home ownership,” says Jeff Schwartz, executive director at the Consolidated Credit Counseling Services of Canada.
“It is crucial for this generation to make an air-tight financial plan, that includes more saving, less spending and less dependence on debt, so that they can keep the good financial times rolling.”
The job question
Many of these millennials have already experienced a job loss. The lesson from this is: you can’t control the timing or existence of life events that impact your finances. However, you can control your own financial future by making good financial decisions. That includes measures such as setting a household budget, adopting a save-to-spend attitude, and earmarking savings for emergencies. Taking these steps will reduce the need to use debt to bail yourself out.
Part of the overall success for millennials has been their ability to jump into the homeownership pool. However, house prices continue to balloon in some cities, which means that first-time homebuyers are leveraging themselves with more and more debt.
While home ownership is a shrewd financial move, it’s not a good idea to overload yourself with debt. A housing correction or a job loss could turn your happy home into a house of cards. Be proactive by spending within your means. Don’t max out your mortgage loan. Ramp up the saving side of your balance sheet to reduce your down payment and therefore reduce the amount of debt you owe.
You go girl
A steady, swift upward trend for employed women between the ages of 25-34 in Canada has pushed the overall financial health trend upwards.
Why is this? According to this report, the Canadian female millennials are more educated than ever before. Additionally, it seems that extended maternity leave benefits have contributed to more women entering (and staying in) the workforce.
In the pursuit of work-life balance, recognize that taking time off to raise a family will impact you financially, and you should start saving well before baby arrives.
Try a “maternity leave practice run” by living off of a smaller income for a few months. Adjust your budget and see if you can make it work. You don’t want to accumulate debt in pursuit of that work-life balance.
Are you a millennial who has racked up debt? Are you pursuing home ownership, but debt load is standing in your way? Are you worried about being able to pay the costs associated with having a family? We can help. Call one of our trained credit counsellors or check out our free online debt analysis tool to get started