Many Canadian millennials are optimistic about their financial future, according to an Equifax Canada generational survey. Proprietary data that tracked credit scores over the past decade suggests that they have a good reason for their optimism, says the company.
Credit scores generally range on a scale from 300 to 900, and the higher the number, the better the score. Today’s 18 to 24 year olds have an average credit score of 692, compared to 681 ten years ago, revealed the study released Nov. 7.
“Credit card use has accelerated for millennials in recent years,” said Julie Kuzmic, director of consumer advocacy, Equifax Canada. “It’s speculative, but this younger age group appears to have learned from the misfortune of their older peers. Establishing good credit behaviours at this stage in life and maintaining them will likely serve Millennials well as they get older.”
Cannot cover expenses
Eighty-two per cent of millennials aged 18-34 say they are optimistic about their financial future, compared to 73 per cent of the general population. However, 27 per cent of Canadians aged 45-54 say they cannot save on a monthly basis. In addition, 35 per cent of Canadians say they make just enough to cover expenses and 17 per cent say they cannot cover their expenses. Thirty-four per cent of millennials aged 18-24 say they cannot cover their expenses.
“It’s good to be optimistic, but it must be grounded in financial reality,” says Kuzmic. “So, while many Canadians feel they’re doing well, our data and other economic indicators suggest more caution is needed for the general population. Millennials also have an uphill battle when it comes to home prices and the general cost of living compared to previous generations.”
Nearly half (45 per cent) of millennials aged 25-34 say they believe their parents had a better standard of living than them at the same age, and over half (54 per cent) of millennials aged 18-24 say they do not think they have enough information to make financial decisions.