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In the past, Canadians have traditionally saved about 10% of their gross income and stashed it away in their piggy banks. Now we don't save.

I was checking this post by Studenomics that talked about why Twenty Somethings are not saving money and being of the same generation Y/ 20 something category, I got to thinking…

In the past, Canadians have traditionally saved about 10% of their gross income and stashed it away in their piggy banks. Currently, the savings rate is about 0% (or with a net negative percentage). In China, it’s 30%. For some reason, we are not saving money any more!

Really, why AREN’T we 20-somethings saving money? Why IS there a disparity between the savings of Generation X and Generation Y?

I personally have a few hypotheses myself.

Other than the ones mentioned by Studenomics, here are some reasons why I think we are so broke.

I think that one of the main reasons we (we being a generalized term) aren’t saving money is because we are so used to:

Our parents are the baby boomers. They worked really hard to secure the financial security that they have now.  They worked hard to make sure we grew up well and had everything that we wanted or needed (or even not needed!), because when they grew up, they didn’t have anything.  I remember when I was a teenager, I would whine for that $80 pair of jeans to be just like the rest of the “cool crowd”. Our parents spoiled us, really.  What we want, we got.  So that brings us to now, where we still have the mindset of what we want, we get.  Even if that means charging that $300 pair of Rock and Republic Jeans to your card when you have $100 left in your bank account.  Or leasing that expensive sports car when you really can’t afford it.  We live in a society now where you have to flash your cash in material goods.  Or else people think you’re a nobody.

We grew up with television, we grew up with technology, we grew up with computers.   We grew up with images of celebrities and rock stars who have everything.  Louis Vuitton bags, iPhones, $250+ jeans, BMW’s, Mercedes… this is the norm everywhere I go- at least for Vancouver, anyway!  We are programmed to think that we need  and deserve these items to be happy.

The other reason I think we aren’t saving money is because of the use of:

  • Credit Card/ Debit Cards

Like Studenomics said, we live in a society now in which we pay for everything by card.  It’s really easy to lose track of how much you’re spending.  I was checking out my credit card statement, and feeling quite proud of myself as I hadn’t had any big purchases on my credit card bill (YET- I haven’t gone Christmas shopping yet) but the bill still added up to $450 because I was purchasing $20 here and there.  Little things really do add up.

That isn’t to say that I would start paying for everything by cash… I love charging things on my credit card because I get points from it!  I guess the main thing to remember is to go over your statements, you have to be AWARE of what you are spending your hard earned money on.  Don’t get trapped into credit card debt- yet sadly we are! According to a recent statistic, the average 18-34 year old has $8200 in credit card debt.

Speaking of debt…

  • Student Loans


Generation Y is  super-educated.  We have bachelor’s degrees, master’s degrees, doctorate degrees… MBA’s (phew, that degree can certainly knock a dent in your pocketbook).  We also have super-student loan debt too!  According to a recent statistic, the average student loan debt is $20,000.  We are pretty lucky here in Canada where we don’t have to pay $40,000 a year for school.  Back then, there wasn’t so much emphasis based on post-secondary education, you could succeed without a university degree or further education.  The story’s different now- I know some people graduating from University of British Columbia (kind of an Ivy League school in Canada) with a degree are SOL- some working in retail still because it’s so hard to find a job.  So we end up with high debts and a low paying job.  It sucks.

  • Banks are to Blame!


Well, maybe.  (Haha, that’s another trait of Generation Y, we like to blame things on others, but that’s another story).  Back then, you had to have 25% down to buy a house.  Now it’s all different, there’s so many options to choose from.  Nowadays, the banks can lend you a mortgage for 5% down and do a 35 year mortgage even!  This means higher monthly payments and higher interest, and less money in your pocket in the long run, but I guess we don’t really realize it.


What do you think?  Are there any other reasons out there that us 20 somethings aren’t saving any money other than the ones Studenomics and I mentioned?

Article comments

Becky Chrestman says:

College teaches you to save. How else can you maximize your beer money?

101 Centavos says:

Agree w/ Kellen. In your 20’s, retirement seems waaaaay off in the distant future.

young says:

@101 Centavos- Thats true. However, when you have kids, you have to put money into their RESPs, raise them, pay of the mortgage. I think retirement is put on the backburner because life happens and it’s hard to think about retirement at any time, I think, unless you are maybe in your 40’s. 🙁

Kellen says:

There just seems to be so much *time* between now and retirement. Also, I know that we are the generation with “helicopter” parents, who step in and fix things for us all through college (not true for everyone, but it’s a common phenomenon these days.) So upon entering the “real world” of work, we know we still have that safety net if we need it.

young says:

@Kellen- So true… I admit that sometimes I feel that way myself too- that if things turn for the worse, I know my parents have my back (though I definitely shouldn’t think this way!)

Studenomist says:

Congrats on the blog man! Wish I found it sooner!

Yes I love how a education in Canada is way cheaper than across the border. With that being said we all still accumulate tons of unnecessary debt.

You are spot on with your points. Our generation is too busy being cool and buying Rock & Republic jeans. Don’t get me wrong, I got my nice clothes and spending habits- but I make sure I save money before I spend some.

Not much more to add man. You pretty much touched upon everything. All the best!

young says:

Thanks for checking my blog out Studenomist! =) Yes, I agree, debt in all forms is definitely not appreciated by me!