Nearly one third of millennials consider paying off their debt their greatest financial concern, and 23 per cent said it was their highest financial priority, according to a new report by BMO Wealth Management.
The report, released July 18 and called “Generation Why”, found that 19 per cent of millennials say they would rather pay off their debts before saving for retirement.
The Canadian Federation of Students said that in 2017, millennials had on average about $27,000 of student debt.
"With the number of students pursuing post-secondary education twice the number of previous generations, millennials have focused on higher education as the best path to increase their opportunities in a challenging and competitive employment market," said Chris Buttigieg, director, Wealth Institute, 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."
Respondents said that lack of job opportunities (63 per cent) and uncertainty in personal relationships (62 per cent), like divorces or partners losing their incomes, also affect their ability to save.
Focused on short-term goals
The report found millennials are more focused on short-term goals. Forty-one per cent of respondents said they do not consider long-term financial goals, like saving for retirement, to be a priority.
BMO offered three financial tips to millennials in light of this. The first is to make sure they are insured, in order to be prepared for any unexpected turn of events. The second is to set clear financial goals and to have a financial plan to better prioritize goals and how to achieve them. The third is to invest in a Registered Retirement Savings Plan (RRSP) or a Tax-Free Savings Account (TFSA). These will provide millennials with benefits they do not have with a savings account.
Seek professional advice
BMO also suggested millennials consult a financial advisor. “A financial professional can…provide information and guidance that will help increase financial literacy specific to any areas of concern.”