Each generation’s approach to money is deeply shaped by the economic climate they grew up in. Their habits around spending, saving, and investing reflect broader societal and economic trends.
Baby Boomers, for example, were influenced by post-war prosperity, which fostered a strong belief in labour, homeownership, and traditional saving. Millennials, on the other hand, entered the job market around the 2008 financial crisis which instilled a more cautious outlook on financial stability. Similarly, Generation Z, shaped by economic uncertainty and rapid tech growth, takes a practical, informed approach to money.
Given each generation’s unique financial experiences and challenges, financial resources should be tailored to meet their specific needs. Let’s explore how these generational trends influence key areas like saving, investing, and managing debt.
Money And Stress: Generational Differences
Many Canadians are feeling financially squeezed, including Generation Z (Gen Z) as they enter the workforce and take on financial responsibilities like rent and groceries. A study from Interac Corp. shows that 42% of Gen Z are stressed about their finances, largely due to inflation and rising costs. Statistics Canada reports that grocery prices rose 6.9% in 2023, making it harder for young Canadians to manage their budgets.
More than half of millennials and Gen Z (56%) have pushed their home-buying plans due to the economy and home affordability concerns.
Older generations like Baby Boomers and Gen X faced less financial pressure thanks to more stable economic conditions, with lower inflation and more affordable essentials. Many benefited from stronger job security, pensions, and lower student debt. Moreover, housing in the 1970s was significantly cheaper in relation to income. In fact, in the 1970s, the median house price in Toronto was about 3.9 times the median household income. Now, that number is roughly 9.3 times.
That said, according to a study, all Canadians are struggling to save for retirement. including older Canadians. 44% of older Canadians (55 – 64) had $5,000 or less saved for retirement.
Learn more: Affordable Housing Crisis In Canada
Gen Z Is Adopting A “Debit-First” Approach
In response to today’s pressures, Gen Z is adopting a “debit-first” approach, using debit cards to manage spending and avoid credit card debt. Across Canada, this shift is clear—more people are turning to Interac Debit at grocery stores, making smaller, more frequent purchases as they adjust to tighter budgets.
Debt To Income Ratio: Generational Differences
Debt levels and their causes vary greatly across generations, highlighting Canada’s complex financial landscape.
Younger millennials under 35 face a debt-to-income ratio of 179.4% 2024 (Q2), which has slightly increased since 2020 from 165.4%. However, only one-third of this group holds a mortgage, reflecting broader housing market trends where affordability remains a key issue.
For Canadians aged 35 to 44, the debt-to-income ratio reached 260.4% in 2024 (Q2), a sharp rise from around 230% in 2020 (Q2). This age group is heavily burdened by rising housing costs and lifestyle pressures.
Boomers aged 65 and over have the lowest debt-to-income ratios. Currently, it sits at 70.4% (2024 Q2). This may be because only 14% of Boomer households still have mortgage debt and the balance is generally half that of a millennial’s mortgage.
Learn more: Average Debt By Age In Canada: Mortgages, Consumer & Student Loans
Financial Advice: Generational Differences
When it comes to seeking financial information and advice, there’s a shift in where younger Canadians are getting their knowledge. More and more younger Canadians seem to rely on technology and social relationships for financial advice.
Millennials And Gen Z
According to the Canadian Financial Capability Survey, younger Canadians between the ages of 18 and 34 years (millennials and Gen Z) are more likely to ask friends or family members (59%) or use the Internet (51%). Similarly, according to a BMO study, 55% of Gen Z use AI for financial advice to help manage their finances and investments – more than any other generation.
Boomers
According to the Canadian Financial Capability Survey, older Canadians that are 65 years old and older are more likely to seek advice from a financial advisor or planner (51%) or a bank (41%). And as far as technology goes, Boomers are much less likely to rely on internet sources with only a reported 13% using online platforms.
Investing: Generational Differences
Investing styles and attitudes differ greatly across generations, especially when it comes to socially responsible investing (SRI).
Gen Z And Millennials
As mentioned, Generation Z frequently uses the internet and AI for financial advice, including how to manage their investments. While technology is a key part of their strategy, they still value human advice and seek mentorship with 73% seeking support from their immediate family, according to the Interac Corp study. Part of this can be attributed to some of the economic and employment instability we’ve mentioned before.
Millennials are also tech-savvy and rely even more on digital tools, with 67% using robo-advisors as part of their investment approach. This comfort with technology has helped them build higher median net worth compared to Generation X.
Millennials and Gen Z are highly interested in socially responsible investing, with two-thirds concerned about environmental and social issues.
Baby Boomers
Generational divide shows how different life stages and values shape investment decisions today. Baby Boomers, many of whom are nearing or in retirement, show less interest in these concerns.
In 2022, two-thirds of Boomers aged 58 and older said they were only somewhat or not at all concerned about environmental and social issues, focusing more on protecting their savings and investments.
Final Thoughts
Despite the rapid advancements in personal finance—like the rise of apps, digital cash, cryptocurrencies, and robo-advisers—the fundamentals of financial literacy are more crucial than ever. These are essential principles young people should know, especially those without inheritances and who must rely on their knowledge to navigate their financial goals and challenges. Mastering these basics can equip you with the confidence and tools needed to navigate today’s financial landscape and turn challenges into opportunities.
