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What are younger Canadians’ top money worries?

With housing prices increasing, rising interest rates, and now, soaring inflation, it’s no wonder younger Canadians are more anxious than ever about their personal finances.

According to the 2022 TD Wealth Survey, Canadians under the age of 35 agreed that they are concerned about nearly every aspect of their personal finances than older generations. These include:

  • Cost of living (89 per cent)
  • Rising inflation (85 per cent)
  • Housing prices (80 per cent)
  • Market fluctuations due to the pandemic (71 per cent)
  • Rising interest/mortgage rates (71 per cent)

Inflation

With inflation rising to levels unseen in this country since the early 1990s, Canadians are becoming increasingly concerned about their finances, and younger generations appear to be the most worried about everything from mortgage rates to job security.

According to the 2022 TD Wealth Survey, surging inflation topped the list of personal finance concerns for 87 per cent of Canadians, followed closely by the cost of living at 84 per cent.

Younger Canadians under the age of 35 were significantly more likely than older generations to be concerned about:

    • Housing prices (80 per cent vs. 54 per cent);
    • Rising interest rates (71 per cent vs. 49 per cent);
    • Market fluctuations (71 per cent vs. 66 per cent);
    • Their salary/earning capacity (67 per cent vs. 43 per cent); and
    • Job security (47 per cent vs. 24 per cent).

“Inflation has risen to a 30-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,” said Beata Caranci, SVP & Chief Economist, TD Bank Group. “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. 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.”

Key Findings:

  • Due to rising inflation, nearly six-in-ten (56 per cent) investors have had to re-visit their investment strategy
  • Nearly six-in-ten (58 per cent) investors regret not starting to invest at an earlier age
  • Going on vacation is the top overall financial goal and priority for Canadians post-pandemic (19 per cent), primarily among those over the age of 35 with more investable assets; however, not for those with other personal finance concerns, such as paying down debt
  • In fact, paying down debt was the second-highest priority for Canadians (18 per cent), followed by investing/trading in the stock market to generate more income (16 per cent)
  • For those under the age of 35, specifically, the top priority was saving for a down payment (23 per cent)

“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,” said Brad Simpson, Chief Wealth Strategist, TD Wealth. “While we expect this rise in inflation to ebb, it’s an important reminder for Canadians to remain focused on their long-term financial goals, understand their risk tolerance and connect with a Financial Advisor who can support them.”

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