Debt the top financial concern for Canadian millennials

The recent study also found various other financial issues affecting young Canadians

Debt the top financial concern for Canadian millennials
A new study from BMO Wealth Management has found that debt is a considerable financial concern among Canadian millennials.

The report, titled Generation Why, found almost one third (29%) of respondents considered paying down debt as their greatest financial concern, while 23% said it was their highest financial priority. Around one in five (19%) respondents also indicated they would prefer to pay off their accumulated debt before moving on to retirement savings.

Citing the Canadian Federation of Students, BMO said that Canadian millennials with student debt owed $27,000 on average in 2015.

“[M]illennials have focused on higher education as the best path to increase their opportunities in a challenging and competitive employment market,” said Chris Buttigieg, director of the wealth institute at BMO Wealth Management. “However, the opportunity to pursue further education has to be weighed against the accumulation of additional debt, which makes the decision a difficult one.”

Despite millennials’ strong skill set and ability to learn to use new technologies, employment remains elusive for them; 63% of the respondents cited lack of job security and opportunities as a factor that affect their ability to save. Uncertainty in personal relationships, such as divorces or partners losing income, is also a concern among 62% of those surveyed.

They were also found to be focused on short-term financial goals, as 41% do not consider long-term goals, such as preparing their nest egg, an immediate priority. That’s compared to 24% of respondents who said that they worry about their ability to afford retirement.

Among the respondents, there was a higher preference for savings accounts (39%) than for tax-advantaged accounts like registered retirement savings plans (RRSPs) or tax-free savings accounts (TFSAs).

According to the BMO study, millennials may benefit from guidance to address long-term concerns. These include education on the use of insurance, financial plans, and RRSPs and TFSAs.

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