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Millennials: Getting the right mix of financial advice from professionals and family
TD survey finds more than two in five Gen Y Canadians consider parents their most trusted financial advisor
TORONTO, April 28, 2014 /CNW/ - Canadian millennials have a difficult set of competing financial priorities such as monthly bills, paying down student loans, covering a night out and still trying to put something aside towards their savings. They also have competing sources of advice on how to balance those priorities, including their parents and peers. But as a recent TD survey discovered, only a third of Gen Y Canadians turn to a bank financial expert for help, even though those who do work with a financial advisor say they are more likely to have money left over each month to put towards their financial goals.
"Good financial habits are something everyone can develop, and for many people, that starts with learning from their parents, followed up with specialized advice that a financial expert can provide," said Raymond Chun, Senior Vice President, Everyday Banking, Personal & Indirect Lending, TD Canada Trust. "Parents have a lot of wisdom to pass along, but with the wide variety of financial products and services available today, it's understandable they might not have all of the answers their children need."
The fundamentals of personal finance, such as managing a budget, don't change from generation to generation - it's balancing money-in with money-out. But Chun says what can change are the economic realities facing younger Canadians, which is why they should build a strong financial routine with the right blend of professional and familial financial advice.
Casie Stewart is a 31-year-old social media specialist and blogger who recently spent five years paying off her student debt. She agrees her parents are good role models when it comes to responsible financial habits but says their specific financial advice doesn't always apply to her situation.
"My parents always taught me to save, but it's difficult when you don't have much money coming in," she said. "It was haunting to have debt from school and I didn't know how to manage it."
Casie says that's why she also turned to a professional financial advisor for help, after explaining to her parents some of the difficulties she had saving money.
"I met with a financial advisor because I knew I needed help to turn my finances around," she said. "I set a goal to be debt free by 30. For five years I made monthly payments and never missed one. It was really helpful to keep that five year goal in mind, and now I'm looking at different types of financial goals."
Chun agrees. Starting good habits from the first pay cheque and talking to a financial advisor to complement the advice from parents can set the foundation for achieving short-term and long-term financial goals, he said.
Here's his Top-Five list to help Gen Y Canadians meet their financial goals:
- Document spending for a month - at the end of that month, you'll have a much better idea of how much of your money is spent on essential items and on discretionary ones, and whether you need to cut back or allocate a maximum monthly spend in some areas.
- Develop a monthly budget - assign dollars to all ongoing essential expenses like rent, student loan repayments, groceries and entertainment.
- Repetition is king - revisit and revise your budget as your financial situation evolves and as your income, lifestyle, and financial goals change. Consider setting a reminder on your smartphone to track and examine your budget each month.
- Save - arrange for an automatic transfer of a set amount into a savings account each week so the money is put away before it can be spent. It's not the amount that matters, but rather starting a good savings habit that can grow along with your income.
- Talk to a financial advisor - according to the survey, Gen Y Canadians who have a budget, follow it and work with a financial adviser are more likely than their peers to have money left over at the end of each month to put towards their financial goals.
For online tools to complement advice from parents and a financial advisor please visit: www.tdcanadatrust.com/budget
About the TD Canada Do Parents Know Best Poll
TD Canada Trust commissioned Environics Research Group to conduct an online custom survey of 1,323 Gen Y Canadians within a broader sample of 6,015 Canadians aged 18 years and older. Responses were collected between February 11 and 25, 2014.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, to credit protection and travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as in over 1,100 branches, with convenient hours to serve customers better. For more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America.
SOURCE TD Canada Trust
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