Don't bank on an inheritance, do this instead

Don’t bank on an inheritance; do this instead

By Stefania Di Verdi on January 8, 2014
Estimated reading time: 2 minutes

Younger Canadians are struggling financially and help isn't on the way. Here's what to do about it.

Are you better off financially than you were two years ago? Nearly half (46%) of younger Canadians aged 25-34 who responded to a recent poll for Manulife say they’re worse off. A scary thought since this cohort, one hopes, is mostly done school and settling into the full-time workforce. For comparison’s sake, 40% of those aged 35-44 say they are worse off financially. Despite their financial circumstances, 62% of younger Canadians say they’re optimistic they will be in a better financial position two years from now. Optimism is good but it shouldn’t hide the hard truth. We have our work cut out for us. I say “we” because I’m in the Generation Y camp, albeit the older of the bunch. Our generation knows all too well the challenges of today’s job market. Not only that, but according to the study’s findings, we won’t get as much help from our parents as previous generations did. Some 43% of Canadians say they haven’t given any thought to how much cash or assets they’ll leave to their heirs. As many as 13% plan to leave nothing, while 29% say they will leave less than $100,000. Only 2% plan to leave an inheritance of $1 million or more. Here’s what I glean from the above numbers: 98% of us will have to take care of ourselves because, let’s face it, living a fulfilling adult life for the next 60 to 70 years will cost a lot more than $1 million. “The reality is that young Canadians will be the first generation that will not be better off than their parents. Many Canadians haven’t even thought about what cash or assets they will leave to their children,” said Manulife’s Paul Lorentz in a press release. “Young Canadians might need some of the financial discipline of their great grandparents, those who lived through the Depression, coupled with modern financial solutions.” That’s good advice and boils down to this fundamental rule of personal finance: Spend less than you make and invest the difference. The first part takes hard work and discipline. The second part takes a little education and coaching. If you haven’t got the first part down pat, there’s little hope you’ll ever feel financially secure. Here’s a budgeting worksheet from The MoneySense Complete Financial Plan Kit to get you started on the right path. It will help pay down debt and build savings. If it’s the second part you’re struggling with, again, you’ve come to the right place. MoneySense.ca has regular stories on DIY investing as well as a directory of fee-only planners that can help map out your portfolio. You can also pick up The MoneySense Beginners Guide to Personal Finance. Still need some inspiration? Check out these stories and you’ll be on your way before you know it… How to recover from a debt hangover Should I use an RRSP or a TFSA? How smart people use their TFSA What to put in your RRSP

Comments Cancel reply

Columns

Why I’m optimistic about the markets in 2025–tariffs or no

This advisor isn’t losing any sleep over the markets. In fact, looking back at 2024 and forward into 2025,...

Why I’m optimistic about the markets in 2025–tariffs or no

A car steering wheel and a bowl of pasta, as symbols of how to get the best auto loan interest rate.

loans

Car loan interest rates: What’s the best Canadians can get?

Car loan interest rates can be as confusing as a complicated recipe, and just as daunting to navigate. This...

Car loan interest rates: What’s the best Canadians can get?

Newcomer to Canada buying their first car at the dealership asking questions of the sales person about getting a car loan.

Newcomers to Canada

Auto loans for newcomers—questions to ask when buying your first car in Canada

Buying your first car in Canada is like any other major purchase. Ask a lot of questions, not just...

Auto loans for newcomers—questions to ask when buying your first car in Canada

A woman using the MoneySense Finder tool at her work-from-home desk

ETFs

Buying ETFs in Canada Tool: The MoneySense ETF Screener

Which ETFs should you invest in? Which ones best suit your risk tolerance? What about personal ethics? Check out...

Buying ETFs in Canada Tool: The MoneySense ETF Screener

Budgeting

What is the Canada Carbon Rebate? Plus, dates and amounts for 2025 rebates

The Canadian government is sending out the last carbon rebate of 2024. See who’s eligible and how much you...

What is the Canada Carbon Rebate? Plus, dates and amounts for 2025 rebates

Canadian woman buying a car, as she learns to manage her money.

loans

Personal Finance For Canadians For Dummies excerpt: How to manage money and stop overspending

Learn how to manage your money, understand your earnings, invest wisely and more, from this excerpt of Personal Finance...

Personal Finance For Canadians For Dummies excerpt: How to manage money and stop overspending

Save

How much money should I have saved by age 40?

Sponsored By

CIBC

How much money should I have saved by age 40?

Save

How much money should I have saved by age 25?

Sponsored By

CIBC

How much money should I have saved by age 25?

Real Estate

How changes to the Home Buyers’ Plan could affect your down payment

Sponsored By

EQ Bank

How changes to the Home Buyers’ Plan could affect your down payment

FHSA

Unsure about buying a home? Why you should open an FHSA now anyway

Sponsored By

EQ Bank

Unsure about buying a home? Why you should open an FHSA now anyway

Don’t bank on an inheritance; do this instead

Comments Cancel reply

Related Articles

Why I’m optimistic about the markets in 2025–tariffs or no

Car loan interest rates: What’s the best Canadians can get?

Auto loans for newcomers—questions to ask when buying your first car in Canada​

Buying ETFs in Canada Tool: The MoneySense ETF Screener

What is the Canada Carbon Rebate? Plus, dates and amounts for 2025 rebates

Personal Finance For Canadians For Dummies excerpt: How to manage money and stop overspending

How much money should I have saved by age 40?

How much money should I have saved by age 25?

How changes to the Home Buyers’ Plan could affect your down payment

Unsure about buying a home? Why you should open an FHSA now anyway

Auto loans for newcomers—questions to ask when buying your first car in Canada