Poll finds younger adult Canadians have faced greater disruptions, but are eager to take control of their financial destiny
Whether it’s “what doesn’t kill you make you stronger” or “there’s nowhere to go but up,” it seems younger Canadians whose lives have been altered by the pandemic are adopting a forward-looking attitude and taking steps to build brighter financial futures.
In a survey of Canadians in Generation Z (those between 18 and 25 years old) conducted by the Canadian Bankers Association (CBA) for Financial Literacy Month, 53% said the pandemic upended their financial lives; for those in less stable financial situations, that percentage rose to 73%. But the great majority of Gen Z respondents also cited feelings of optimism around their financial futures, and nearly all participants (98%) are actively making plans to strengthen their financial resilience.
"Gen Z was dealt a disproportionately tough hand during the pandemic, but it has also shown incredible resilience in channeling its natural gifts for perseverance, adaptability and motivation," says Neil Parmenter, President and CEO, Canadian Bankers Association. "Despite the setbacks, younger Canadians are eager to forge ahead, be prepared for the unexpected and build bright futures as our economy recovers."
Having lived through two disruptive moments in economic history, including living through the Great Recession of 2008-09 in their formative years, many members of Gen Z are feeling increased levels of stress. Around half of the survey participants (51%) said they’ve experienced anxiety related to debt over the course of the pandemic, and roughly two fifths (41%) said their debt levels have increased because of the pandemic.
The survey also found a strong inclination towards saving among respondents, with roughly three fourths saying they have a savings account (74%) and that they set at least one per cent of their income aside as savings (77%), with an average of 9% of income saved across all respondents. Even among low-income respondents, the majority (68%) showed a strong savings mindset.
When asked what they’re saving towards, the largest number of respondents said creating an emergency fund and achieving financial independence as their goal. Tax-free savings accounts (TFSAs) were the most popular savings vehicle (cited by 47% of respondents), followed by high-interest savings accounts (27%) and registered retirement savings plans (RRSPs, cited by 20%).
Seven tenths of all survey participants (71%) also said they are actively budgeting, including more than half (58%) who say they do so in a formal manner. Formal budgeting approaches include keeping a written record of expenses (21%), maintaining financial spreadsheets (20%), and using digital tools (17%). However, 92% of all respondents cited barriers in sticking to their budget including insufficient earnings (43%), unexpected expenses (42%), and impulse shopping (38%).
Things certainly could have been worse. A little more than half of Gen Zers (52%) – and almost three quarters (73%) of those in precarious financial situations – said they would have suffered greatly during the pandemic if it hadn’t been for the income support programs put in place by the government.
All told, roughly two thirds (64%) of respondents said they received COVID-related emergency benefits. Within that cohort, around three fifths (57%) saved at least part of the money, and slightly fewer than half (48%) said they used government benefits to chip away at their debt.
