Young Canadians are financially fit

Canadian youth will start on firmer financial footing than their baby boomer parents, says BMO.

“Apart from taking on bigger loans to buy pricier homes, young Canadians today enjoy better job prospects, earn more and are wealthier than in the 1980s,” says Sal Guatieri, a senior economist at BMO Capital Markets.

Read: Spendthrift boomers worried about retirement

Jobs

• Millennials have a 93% chance of finding a job, compared with 90% in the mid-1980s
• Today’s unemployed youth go without work almost a month less than in the mid-1980s
• More young people today either have a job or are searching for one, though fewer work full-time

Income

• Millennials can buy about 2% more goods and services than their parents could in 1984

Read: 5 ways to understand millennials

Wealth

• The median net worth of households headed by someone 25-34 years old was $52,000 in 2012—almost twice as high as that in 1984 ($28,752 in 2012 constant dollars).
• For families headed by someone aged 35-44 years old, median net worth was $182,500 in 2012, about twice as high as in 1984.

Debt

• In 2012, 84.4% of 25-34 year-olds had debt, compared with 82% in 1984
• Young people today likely have more student debt, as tuition has risen three times faster than consumer prices since 1984

Housing

• The average house price was 10.4 times the median income of young families in 2011, more than double the ratio of thirty years ago, relative to income. Despite double-digit mortgage rates in 1984, young homeowners today must pay more to service a mortgage.

Read: Get to know your next generation of clients