Edward Jones study: Generation gap linked to significant differences in how Canadians spend and save their money

News release | Feb. 18, 2020

Almost 80 per cent (77) of Gen Xers have financial concerns.

Today, Edward Jones released a new study which reveals the unique relationships Canadians have with money, and how their approach to money differs from generation-to-generation.

The study found that 58 per cent of Canadians consider themselves savers, while 37 per cent self-identify as spenders. Boomers (55-75) were most likely to identify as savers (62 per cent), while Millennials (25-39) were more likely to identify as spenders (42 per cent).

When it comes to paying down debt, regardless of age, Canadian are more alike than they are different. While spenders were considerably more likely to prioritize paying down debt (45 per cent) compared to savers (26 per cent). Gen Z (18-24), Millennials (25-39), and Gen X (40-54) each cited paying down debt as their single most important short-term financial priority at 37 per cent, 40 per cent, and 37 per cent respectively. In fact, 49 per cent of respondents in these generational cohorts noted they would prioritize paying down debt if they received a $10,000 windfall.

Other than paying down debt, the study shows a generational divide in how Canadians are diverting their income. While Millennials (25-39) and Boomers (55-75) are more likely to spend their money on experiences such as dinners, concerts, and vacations (58 per cent and 57 per cent respectively), Gen Z (18-24) were most likely to spend their savings on acquiring new things like clothing and electronics, compared to older generations.

“While notionally we understand that different generations will have different financial priorities, this study shows us more than how Canadian at different life stages spend and save – it sheds a light on how Canadians feel about their money” said David Gunn, Country Leader, Edward Jones Canada. “As the outlook towards managing finances changes from generation to generation, so does our approach when it comes to understating the individual needs of Canadian investors and in how we support them in achieving their goals – both personal and financial as they are intrinsically linked.”

When asked about their most important short-term financial priority, Boomers cited maintaining their lifestyle (37 per cent) and nearly half of Boomers stated they do not have any financial worries (47 per cent). Comparatively, 77 per cent of Gen Xers (40-54) noted they have financial concerns.

The study also uncovered how Canadians are investing their money. While 65 per cent¬ of spenders invest their money in a TFSA, RRSP, real estate or other investment vehicle, 33 per cent cite that they don’t invest at all. Savers are more likely to take advantage of investment products, with nearly 80 per cent currently investing their money in one of the investment vehicles mentioned.

Canadians may be waiting too long to begin saving for their retirement. According to the study, only 31.3 per cent of Canadians aged 18-34 invest in an RRSP. That number jumps dramatically to 48 per cent for those aged 35-44 and even more to 59 per cent for those aged 45-54. It would appear younger Canadians prefer investing their money in a TFSA, as 43 per cent of those aged 18-34 are investing in a TFSA.

About Edward Jones

Edward Jones is a full-service investment dealer with more than 850 financial advisors in Canadian communities from coast-to-coast. A member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund, the firm is also a participating organization in the Toronto Stock Exchange. Edward Jones has been ranked #1 for seven consecutive years in J.D. Power's Full Service Investor Satisfaction Study (2013-2019). For more information, visit edwardjones.ca.

Edward Jones received the highest score in the J.D. Power 2013-2019 Canada Full Service Investor Satisfaction Studies of investors’ satisfaction with their full-service investment firm. Visit jdpower.com/awards.

Important information:

This Edward Jones Survey presents the findings of 2 online surveys completed online between Dec 13-16, 2019, and January 17-20, 2020, with 1526 and 1587 Canadians respectively, using Leger’s online panel. The margin of error for these studies was +/-2.5%, 19 times out of 20 each. In order to qualify for this survey respondents had to be 18 years of age or older and reside in Canada.

Edward Jones, its employees and financial advisors are not estate planners and cannot provide tax or legal advice.