Insider · World Post
While having been labelled as spenders for years, Canadian millennials are proving themselves to be disciplined and intentional savers, according to a survey by Haventree Bank. Its research revealed that the generation is committed to building financial security, even as they face affordability pressures that make long-term goals increasingly difficult to reach. “Millennials are making informed financial decisions,” Haventree Bank chief executive Fern Glowinsky said in the report.
“What’s holding them back isn’t knowledge or willpower. It’s how much is left at the end of the month.” Haventree Bank partnered with Angus Reid in a survey of 1,000 Canadians aged 30 to 45 about how they handle their money. The survey said 66 per cent of millennials contribute to savings or investments at least monthly, including 42 per cent who do so every paycheque.
Eight per cent of millennials don’t contribute at all. Of those who invest, 58 per cent hold most of their long-term savings in registered accounts, such as a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP). The amounts they set aside remain modest.
The poll said 62 per cent say they invest less than $10,000 annually, while 69 per cent save less than $10,000 per year. Another 15 per cent say they are currently unable to invest, and 10 per cent cannot put money aside for savings at all. When asked what holds back their savings, 55 per cent of millennials named a lack of disposable income, and 16 per cent named debt.
The survey said 29 per cent of men invest $10,000 or more, compared to 18 per cent of women. Meanwhile, 19 per cent of women say they can’t invest at all, compared to 10 per cent of men. Haventree said the main thing limiting how much millennials put away isn’t how often they save but how much they have left to save.
Despite these saving habits, many millennials remain concerned about their long-term financial future, particularly when it comes to retirement, the report said. Sixty-nine per cent of respondents say their primary reason for saving is to retire comfortably or achieve financial independence before traditional retirement age. Confidence about achieving retirement goals is much lower, with older millennials less likely to be aiming for early retirement.
The poll said 20 per cent of those aged 40 to 45 expect to be financially ready to retire after 65, compared with 12 per cent of those aged 30 to 34. It said 27 per cent of older millennials say they’re just trying to cover their costs and long-term planning isn’t realistic right now, compared with 19 per cent of those aged 30 to 34. Editor’s Picks When asked what’s holding them back from saving more, millennials delivered a clear answer, the report said, with 55 per cent citing a lack of disposable income as their biggest barrier to building savings.
When it comes to their influences in financial decisions, millennials trust their own research than relying on AI. The report said millennials don’t necessarily need to be convinced to save but need solutions that help maximize every dollar they can set aside.
Source: Financial Post
