Nov 9, 2018
Pattie Lovett-Reid: Millennials are optimistic about their financial future – and they should be
The majority of young Canadians are optimistic about their financial future and there’s a good reason why, according to a new report from Equifax Canada.
The survey, released Wednesday, examined the credit scores of Canadians over the last decade. It found 82 per cent of millennials aged 18-34 are feeling positive about their financial future compared with 73 per cent of the general population.
The average Equifax credit score for those between the ages of 18 and 24 was 681 a decade ago, while the same age group today has an average credit score of 692. Other age groups across the board have declined over the same 10 year-time frame. For context, credit scores range on a scale from 300 to 900. Anything over 660 is considered to be good by most lenders.
The good news is while credit card usage has accelerated for millennials in recent years, they are establishing good credit behaviours at a young age. Taking control of the financial situation younger in life tends to serve you well older in life.
However, there is so much more that sets you up financially than a good credit score, including paying off debt in its entirety, and making savings a priority – although that can be tough as millennials still have to contend with higher home prices, a higher cost of living, and lower salary realities.
Forty-seven per cent of those making less than $40,000 annually indicated they are not able to save money on a regular basis. But there is good news for parents who want to help out their young adult children financially. Millennials 18-24 who were gifted $5,000 were the most likely age group to tuck the money into a savings account.
Back to getting ahead financially, cutting expenses is a viable option if you are willing. It would appear, however, more difficult than you think. Millennials say they would have the hardest time cutting back on expenses such as eating out (33 per cent), morning coffee (13 per cent) and giving up Netflix (11 per cent).
Millennials may have some tweaking to do in order to achieve their life financial goals, and while this is somewhat speculative, I wouldn’t bet against them.
