The Millennial name has been given to the generation that was born between 1982 and 2004. They are also known as Generation Y

The name Millennial has been given to this group because they were born near, or came of age during, the dawn of the 21st century – the new millennium. They were born into a digital world which means that technology has always been a part of their everyday lives – it’s been estimated that they check their phones as many as 43 times daily.

Millennials face the most uncertain economic future of perhaps any generation since the great Depression!

The job market has improved a little over the past couple of years but Millennials face a 20-year trend of decreasing labor market mobility. Labor market mobility started to stagnate in the year 2000, just as the oldest Millennials were entering the job market. When workers don’t move around, both from job to job and from region to region, employers have more power when negotiating wages which translates into employees getting paid less.

Unfortunately for young people whose careers coincided with this trend, it’s difficult to make up time for lost earnings from early, slow years. The effect of initially low earnings is compounded when subsequent raises are lower and people are less able to save and invest in ways that would provide income in the future.

Add to this financial reality the record amount of debt from varying factors such as student debt or overspending from this generation and you have the makings of a severe economic dilemma. Although they have frequently been labeled as materialistic, spoiled and saddled with a sense of entitlement, it is not without justification that many Millennials feel that they will not be able to achieve life goals such as finding their dream job, buying a house or retiring until much later in their lives than previous generations did.

What keeps the Millennial awake at night when it comes to finances?


With a sluggish job market, some millennials are postponing entering the works force in favour of obtaining higher education or getting a part time job. Low paying entry level jobs and not budgeting for those daily expenses such as car expenses, food expenses and accommodations creates debt.


Being free from financial support from parents is one of the defining characteristics between an adult and a child. Living paycheck-to-paycheck as many Millennials do, doesn’t make this easy. While spending frivolously is never advisable, cutting back on your Starbucks intake isn’t the only solution that will help make your fortune. Accumulating wealth requires broader, long-term thinking.

For instance, if you’re making $30,000 a year, it will be nearly impossible to grow a large sum of money – even if you were to save all of your extra pennies (which we all know no longer exists). The focus should be a mix of both broadening your earning capacity and not spending frivolously. The numbers have to work. Do not spend more that you earn. If you’re not earning enough, you need to find an occupation that pays more or you need to spend less.


Paying off student loans can be a huge burden when millennials attempt to enter the work force. Many millennials are finding that they are not finding high paying jobs upon completing their education programs which increases their debt loads.


Saving for big-ticket items such as home is another goal. Unfortunately, lenders are imposing stricter guidelines for major types of financing, especially mortgages. Therefore, Millennials need to be able to make a substantial down payment if they want to purchase a home.

Back in the good old days, putting your hard-earned money in the bank was rewarded with decent interest rates that translated to okay returns. These days, the bank might be a safe place to store your cash, but it’s not necessarily the smartest place to put it.

Savings accounts typically cause you to lose money over time because their low interest rates do not keep pace with inflation. They’re also subject to fees that can nibble away at your balance. It’s not terrible to keep a small emergency fund in the bank, but the bulk of savings should be elsewhere such as an RRSP or TFSA to achieve a savings goal for a future purchase such as a house or a car or retirement.

  1. Planning for the Future

You’d think that retirement planning would be a no-brainer for this young group, which has watched parents and grandparents struggle so much with recessions and saving money. They should know that Government programs and company pension plans are not reliable or not enough to support their retirement, but they’re lagging behind.


Part of the problem seems to be that a good percentage of Millennials are hoping that either their lottery ticket purchases will pay off or that they’ll inherit money to use toward retirement saving. With such unrealistic expectations, a good quarter of them will likely struggle financially during retirement years.

With the cost of goods, food and housing at such inflated prices now, Millennials will not be able to live off of simply Government plans. The lack of planning and saving could easily lead to financial disaster for retirement-age Millennials.

A third factor that could leave Millennials vastly underprepared for retirement is their avoidance of investing in TFSA’s, RRSP’s due to fear of the stock market. The reasons are largely due to a lack of extra funds and a lack of knowledge of how investing works which creates a fear about investing in equities. In fact Millennials prefer cash three times as much as stocks for long-term investments which does not keep up with the inflation rate. By not being invested in the market, millennials are missing out on growth of their money and missing out on investment returns. Those who start investing young benefit from those extra years.


  1. Meet with a Financial Advisor for expert advice to build wealth
  2. Have a budget, balance money coming in and money going out
  3. Get in the habit of putting aside money on a regular basis for investing (even if you start small) “Pay yourself first”
  4. Education – To obtain a higher paying job to allow you to save for retirement or other goals

Joanne Carmichael is the owner of Carmichael Insurance in the Ottawa Region.  To learn more please contact Joanne Carmichael at:  or 613-723-0747.

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