Younger Canadians are concerned about rising living costs

TD Wealth Survey 2022 shows rising inflation ranked first on the list of personal finance concerns

Younger Canadians are concerned about rising living costs

Canada has not seen inflation reaching levels since the early 1990s and as a result, Canadians are becoming increasingly concerned about their financial stability, with younger generations expressing the greatest fear about everything from mortgage rates to job security.

According to the TD Wealth Survey 2022, rising inflation ranked first on the list of personal finance concerns for 87% of Canadians, followed by the cost of living at 84%.

Younger Canadians were significantly more likely than older generations to be concerned about housing prices (80% vs. 54%), rising interest rates (71% vs. 49%), market swings (71% vs. 66%), salary/earning capacity (67% vs. 43%) and job stability were all concerns among younger Canadians under 35. (47% vs. 24%).

"Inflation has risen to a thirty-year high, something younger Canadians have never experienced before. These folks are also at an earlier stage of their careers, with lower levels of wealth and income relative to older generations, making the rising costs for everyday household items more unnerving—particularly for those facing higher debt service costs due to rising interest rates," Beata Caranci, SVP & Chief Economist for TD Bank Group, said.

The TD Wealth Survey also found that as a result of growing inflation, nearly six out of ten investors (56%) have had to reconsider their investing plan. Almost six out of ten (58%) investors regret not starting to invest at a younger age.

"While we anticipate inflation to slow under the weight of higher interest rates and improved supply chains, it will still remain on the high side into 2023,” Caranci added. “Canadian households should be prepared for an economic phase marked by higher interest rates and higher inflation. However, this is also the phase of the business cycle that requires precision—and a little luck—from the central bank as they try to orchestrate a soft landing."

Vacationing is the top overall financial aim and priority for Canadians post-pandemic (19%), particularly among those over the age of 35 with more investable assets; but, it is not a priority for those with other personal finance issues, such as debt repayment.

Paying down debt was the second most important priority for Canadians (18%), followed by investing/trading in the stock market to increase income (16%. Saving for a down payment was the number one goal for people under the age of 35. (23%)

"With soaring inflation, continued market volatility and rising rates, layered with a weary society slowly emerging from the pandemic, we're seeing increasing levels of financial stress among Canadians and retail investors alike," Brad Simpson, Chief Wealth Strategist for TD Wealth, commented.

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