Archives for June 2017


Why Is It So Difficult for Young Canadians to Save?

Many young Canadians find it difficult to save toward long, short, and medium-term goals because they have student loans to repay, their incomes are lower than middle-aged employees, they have young children to look after, and so on. Some people have mortgages and auto loans to repay in addition to covering basic necessities.

Employment Opportunities

The job market has become more competitive which means that young Canadians must put an extra effort to find decent employment. The fact that young people are often paid less also makes it more difficult to save. Wage and salary levels depend on educational level, field of education, years of experience, region and location, and other factors. Some industries and fields pay more than others, like engineering, IT, law, medicine, and more.


Today, college students pay higher college fees and are often forced to use a student loan to cover tuition, room and board, and related expenses. This means that they have a loan to repay in addition to utility and living expenses. Students who meet the eligibility criteria for a government loan are better off because they are offered low cost financing. Others, however, are forced to resort to personal and student loans offered by banks and other private issuers. The rate depends on one’s credit history and score, but many students have no credit exposure. This makes them risky borrowers for banks.

Other Expenses

While young Canadians have lower income, those who are single often have no one to share expenses with such as rent, food, utility bills, etc. Even couples with low incomes find it difficult to save money and meet living expenses, utility bills, and medical and auto insurance.


Young Canadians with low incomes are often forced to apply for auto loans, personal loans, and other financial products. The problem with unsecured loans is that they have a shorter term than secured ones and go with higher interest rates. What is more, many young people are unable to save a decent amount toward the down payment which makes it more expensive to borrow. This is especially true for auto loans and other types of financing that require a down payment. Young people with less credit exposure are often offered unfavorable terms and rates, which is yet another reason why it is more difficult to save. Those with less or no credit exposure are offered credit cards, mortgages, and other products with more unfavorable terms as well.

Budgeting and Planning

Many young people find it difficult to budget and plan because they have less experience with money and credit management. Some people tend to make unnecessary expenses, and this makes it more difficult to save for a rainy day or emergencies. Bad spending habits and poor financial literacy partly explain this.