Gen X and millennials fret over savings
It’s been a long time since the expression “a penny saved is a penny earned” was commonplace.
When it comes to money, consumers in their 20s worry they’re spending too much, not saving enough — and don’t have enough, to boot. Even so, two out of three also believe they’re doing a good job managing their cash.
Boomers born between 1946 and 1964 naturally think they’ve got it under control, while Gen Xers, those aged 32 to 48, are hardly in better shape than their younger “millennial” cohorts.
These attitudes toward money, by generation, are found in a poll TD Canada Trust commissioned from Environics Research Group in which 2,407 Canadians were asked their thoughts on money and savings. The survey only includes those aged 25 or older, leaving out many younger millennials who were born as late as 1999.
Not surprisingly, responses differed based on age, with boomers most confident about the amount of money they have and their ability to manage it. Millennials are the least secure, with 65 per cent saying they spend too much and 71 per cent saying they don’t save enough.
Fewer Gen X respondents feel they overspend, but otherwise they’re nearly as worried about money as the younger generation, as they grapple with saving for retirement, children’s education and holidays, while paying off mortgages, loans and credit card debt.
All age groups put saving for retirement as their top priority, though it’s highest for Gen X.
Psychologist Bruce Morton from the University of Western Ontario was quoted in a press release saying people’s generation and its culture and economic reality influence their feelings on savings. Millennials’ sense of financial insecurity could be a result of larger economic uncertainty, said Morton.
“Faced with job market challenges and an uncertain economy, millennials may find it difficult to envision a concrete future, making saving for the long-term seem less reasonable,” he said.
Meanwhile, boomers grew up in the post-war heyday when there were jobs aplenty and the larger economy more stable.
Adam Fair, acting director of the Canadian Centre for Financial Literacy (external - login to view), said many people notice a trend toward a more consumerist society that borrows more heavily.
“All these ideas about being frugal seem to be important for previous generations but they don’t seem to hold as much value today,” said Fair.
Not to mention more pressure on the pockets of young people, who often are battling student debts while struggling to find decent-paying jobs, he said.
“A lot of people will discredit the millennials as being frivolous and discount the challenging economy that these young people are growing up in and how difficult it is to afford the things that everyone aspires to, like going to school, buying a house, retiring. All those things are becoming increasingly difficult to attain.”
Attitudes toward money by generation:
Percentage who feel they spend too much:
Gen X: 56
Percentage who feel they need to know more about savings and investment options:
Gen X: 51
Percentage who continually worry about having enough money:
Gen X: 66
Percentage who feel confident in their money management:
Gen X: 70
Percentage who continually feel they don’t save enough:
Gen X: 70
After retirement, what’s the top financial priority by generation?
Millennials: saving for a first home
Gen X: paying off a mortgage
Boomers: saving for a vacation
Source: TD Canada Trust
Gen X and millennials fret over savings - Moneyville.ca (external - login to view)