According to a new study by CIBC, 55 per cent of millennials in Canada say that paying off debt is a top priority. Being debt-free is number one on the bucket list of young people, a series of achievements most hope to complete in their lifetime.
It’s no secret that millennials have accrued significant amounts of debt and continue to as a result of the ever-rising costs of education and housing. A $600-million cut to Ontario's student grant and loan program is having significant ramifications for students this year. According to CBC, some students are even opting to forgo classes for the foreseeable future simply to make ends meet.
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Of all Canadians surveyed, 41 per cent said that “practical” goals trumped “indulgent” ones. As a result, people are focusing on big ticket items like paying off debt, buying property and undertaking home renovations. However, 36 per cent of people feel it's important to work towards practical goals alongside travel and passion pursuits.
"Whether it's skydiving in the tropics or buying the house you've always wanted, the key to reaching your goals is to save," said Carissa Lucreziano, managing director of CIBC Financial Planning and Advice. "The most important first step is to have a plan in place to get yourself there."
The biggest bucket list item for Canadians as a whole is to travel or take a vacation, with 65 per cent dreaming of this opportunity. Millennials are steadfast when it comes to pursuing the practical goal of paying off debt, with 55 per cent seeing this as a top priority. And 41 per cent of Canadians want to make a positive lifestyle change, whether it's trying a new sport or focusing on their health.
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While millennials want to pay off debt, they aren’t necessarily that effective at putting a plan in action. Only 19 per cent of millennials are actively saving for their practical bucket list. Plus, 59 per cent are using either a personal chequing account or holding onto cash at home as a primary method of saving.
"When putting money aside for a specific goal in mind, it's crucial to do it in the most effective way. Look for ways of saving that will help grow your money, such as a savings account, RRSP or TFSA. This way, your money has the opportunity to earn interest so you can reach your goals sooner rather than later," said Ms. Lucreziano in a press release.
Amongst all Canadians saving for their bucket lists, millennials are putting aside the least amount of money. On average, millennials are saving a total of $11,000 for their dreams and $14,900 for their practical goals, the study found.
If you're a millennial, there's a lot to mitigate when it comes to preparing for your future. But with some precision planning, things begin to look a little bit brighter.
