Explore how upbringing and financial literacy shape Canadians' class mobility and savings habits
A survey conducted by Compare the Market AU sheds light on the wealth gap in Canadian society, revealing significant insights into social class mobility, saving habits, and the impact of upbringing on financial literacy and home ownership.
The study, which gathered responses from over 1,000 Canadians, delves into various aspects of financial education, class identity, and the influence of one's background on their current economic status.
It highlights the evolving dynamics of class within Canada, noting a shift towards greater class mobility. Specifically, 32.8 percent of participants who grew up in working-class families now identify as middle class, illustrating a change in the socio-economic landscape.
A finding from the survey is the difference in class upbringing across generations. Younger Canadians are more likely to report having been raised in upper-class environments compared to their older counterparts.
Only 0.4 percent of Canadians aged 58 and above described their upbringing as upper class, a figure that significantly increases to 10.8 percent among 18–25-year-olds.
The survey also explores the role of upbringing in financial literacy, revealing a mixed picture. While 34.6 percent of respondents credited their parents with providing helpful financial lessons, a considerable portion either found their parents' advice unhelpful (19.7 percent) or received no financial guidance from them at all (37.3 percent).
A small percentage (8.4 percent) still struggle with financial management due to the lack of early education on the subject.
Financial habits among Canadians vary, with almost 40 percent budgeting carefully to balance savings and spending, and 32.3 percent considering themselves serious savers who avoid unnecessary expenses.
However, the survey also uncovers concerns about financial management, with 12.0 percent identifying as impulse buyers and 13.2 percent admitting to spending beyond their means without sufficient savings.
Home ownership rates among Canadians show a clear age-related trend. While 59 percent of young adults aged 18-25 do not own homes, this figure decreases with age, with over 65 percent of those 58 and above owning their home.
The survey points to the growing challenge of home ownership in an era of rising house prices and stagnant wage growth, emphasizing the importance of wealth and family support in achieving this milestone.
The disparity in home ownership across social classes is stark, with 63.1 percent of the working class not owning a home, compared to 42.5 percent ta underscores the significant impact of financial background on the ability to own property.
Stephen Zeller, general manager of Money at Compare the Market, emphasizes the importance of financial knowledge in navigating an inflation-prone economy. He suggests that prospective home buyers can benefit from "comparing interest rates" to save money over the lifespan of a loan.
