The Finances of the Future

A survey completed last week by The British Columbia Securities Commission showed that Canada’s youth have some very unrealistic expectations about their financial futures, and most think that they’ll be much wealthier than they’ll actually be. The survey, titled the National Report Card on Youth Financial Literacy, was completed to kick off Financial Literacy Month. It spanned 3,000 Canadian high school graduates, and asked them things such as what they thought they’d be making by a certain age, and where they’d be financially in 10 – 13 years. The results were somewhat shocking when compared with reality.
When asked the question, “How much do you think you’ll be making a year by the time you’re 30?” the average response was “$90,000.” Many of those young people can expect to be bitterly disappointed when they actually reach that age and are making an average of only $31,648 – the number Statistics Canada says is the current average income for those aged 25 – 29 in Canada.
The survey also asked if and when the young people thought they’d own their own home. Nearly three-quarters of respondents (73% to be exact,) said that they expected to be a homeowner by the age of 30. Again, Statistics Canada is the bearer of bad news, stating that only 42% of 25 – 29 year olds currently hold a Canada mortgage.
So can anything be done to help Canada’s youth and show them what their financial future actually holds?
It’s all about education. The survey itself is a good tool to show young people just how far off their own expectations are. But more than that is needed, and individuals such as Tom Hamza, president of the Investor Education Fund, are offering solutions to the problem. The biggest problem is that teens lack an awareness of just how their financial future will look after high school, and Hamza knows that a little education will go a long way.
That’s why he’s currently organizing programs that now include things such as budgeting concepts, investment theories and strategies, along with other practical, day-to-day financial skills, in high school math and literacy courses. The Fund that Hamza oversees has now been implemented in a few Ontario high schools, and he says that other provinces have also taken on similar initiatives. He says that seeing as how these types of programs are ten years overdue, it’s going to be a slow start, but it’s a good starting point.
And with the results of the National Report Card on Youth Financial Literacy, programs like the Investor Education Fund couldn’t have come at a better time.