According to a Deloitte survey, young people are worried about many things, but the cost of living takes the cake.
The survey connected with almost 23,000 Gen Z and Millennials across 44 countries and found that 30 percent do not feel financially secure and 60 percent live paycheck to paycheck.
Behind the rising cost of living, young people are also worried about climate change, unemployment, mental health, health care, disease prevention, crime, personal safety, and the list goes on.
With so many issues to worry about, it is no wonder Gen Z and Millennials are the most anxious compared to the generations before them.
The situation isn’t any better in Alberta. A July 2024 report by MNP found that over 40 percent of Albertans are less than $200 away from being unable to meet their financial obligations each month.
“Alberta is the only province to see such substantial increases this quarter,” said Lindsay Burchill, a Licensed Insolvency Trustee with MNP.
That is a more than 10 percent increase compared to the previous quarter. Based on Statistics Canada’s data, most people struggling with their finances in Alberta are likely young adults.
Statistics Canada found that almost half (46 percent) of people aged 35 to 44 found it challenging to meet their financial needs in 2022, compared to just 25 percent of people aged 65 years and older.
When asked whether their household could cover an unexpected expense of $500, over 35 percent of people aged 35 to 44 years said they couldn’t, compared to 19 percent of people aged 65 years or older.
“There’s little to no emergency fund or savings left to cover a kind of budget shock like a loss of income or a loss of a job,” Burchill told the Calgary Herald.
The generational difference is night and day when it comes to housing concerns.
When asked if they were concerned about affording housing or rent, almost 60 percent of people aged 15 to 24 years and 56 percent of people aged 25 to 34 reported feeling very concerned.
Only 27 percent of people aged 65 years and older were concerned about affordable housing or rent.
Baby boomers are considered the wealthiest generation in history, which explains why most people older than 65 aren’t as concerned about the rising cost of living.
“A unique historical situation—strong economic growth, affordable housing markets, and booming equity markets—allowed boomers to build up a handsome fortune,” wrote Allianz in their 2024 Global Wealth Report.
Is the Grass Greener?
It isn’t all sunshine and rainbows for the older generations, though. Contrary to what most people might expect, Millennials are better positioned for retirement than their predecessors.
One study found that 27 percent of people aged 59 or above do not have money saved for retirement. The result is more Millennials (43 percent) feeling confident about retirement than boomers (20 percent).
Despite feeling more confident than boomers, some reports have shown that Gen Z and Millennials will be the first generations to be worse off than their parents.
This grim reality has left many young people feeling like they are fighting an uphill battle, especially those who are in debt.
Student debt is of particular concern. According to Statistics Canada, 60 percent of Alberta undergraduate students rack up more than $25,000 in debt when they graduate.
The average new bachelor’s degree graduate owes $38,000. Student loans aside, Albertans have the highest level of consumer debt in Canada.
“Wages and incomes have not been keeping pace and so that debt burden in relation to income has been growing as well,” Moshe Lander, a Calgary-based Concordia Economics professor, told City News.
Albertans’ financial fears go hand in hand with their anxieties about employment and job loss. MNP‘s report found that over 40 percent of Albertans surveyed are afraid of losing their jobs.
Population growth combined with there being too few jobs to go around caused Calgary’s jobless rate to climb to just under eight percent last November, marking a two percent increase from the year before.
Yeah, things suck, but it isn’t all bad news. Young people might be worse off than their parents now, but their potential is much higher.
“Taking into account the end of the savings glut and the rising demand for capital to drive the green and digital transformations, Gen Z actually has a good chance to outperform all their predecessors—if they align their savings behaviour to the new realities,” wrote Allianz.
Gen Z is considered the least financially literate generation, but that’s because little 12-year-old Jimmy isn’t running off to learn about economics.
Unless we provide young people with the resources they need to improve their financial literacy, their potential will be wasted. Let’s not fail our youth; let’s set them up for success.
