Nearly half of Gen Z and Millennials are seeking advice on investing and how to grow the money they have, while 54 percent believe digital banking tools and tips play an important role when managing moneyA new BMO Survey reveals a quarter of Canadians feel less financially secure now than they did last year, but 72 per cent remain optimistic about their financial future for the year ahead.
TORONTO, Sept. 13, 2023 /CNW/ – This quarter’s BMO Real Financial Progress Index reveals young Canadians are increasingly seeking guidance on side hustles, how to grow their money and achieve financial security amid concerns about rising interest rates, inflation, and economic uncertainty.
Among personal finance topics, the survey found Gen Z (ages 18 to 24) and Millennials (ages 25 to 44) are most interested in learning how to grow the money they have and diversify their sources of income:
- Financial Anxiety: Concerns about their overall financial situation are the leading source of financial anxiety among Gen Z (90 per cent), as well as younger (ages 25 to 34) (88 per cent) and older (ages 35 to 44) (86 per cent) Millennials.
- Learning to Grow: Younger Millennials are the most likely generation to seek advice on how to grow the money they have (56 per cent), followed by Gen Z (47 per cent) and older Millennials (47 per cent).
- Passive Income for an Active Generation: Nearly half of Gen Z (46 per cent), as well as younger (46 per cent) and older Millennials (50 per cent), are interested in advice on investment strategies.
- The Side Hustle Generation: Nearly half (48 per cent) of younger Millennials are looking for more information on how to generate other sources of income, followed by Gen Z (40 per cent) and older Millennials (36 per cent). Only 23 per cent of Gen X (ages 45 to 54) and 15 per cent Boomers (ages 55 to 64) are looking for more information on side hustles.
- Embracing Entrepreneurship: In the last six months, one in five (20 per cent) Gen Z are in the process of switching jobs and 12 per cent started a business.
- Financial Confidence with Advice: Over two thirds (68 per cent) of Gen Z believe a financial advisor is important to helping them reach their financial goals – more than any other generation.
“As many young Canadians begin managing their own finances for the first time, they recognize the importance of budgeting, tracking spending, investing, and putting their money to work to allow their savings to grow and outpace inflation,” said Gayle Ramsay, Head, Everyday Banking, Segment & Customer Growth, BMO. “While the current interest rate environment and the rising cost of living has been challenging, working with a professional and taking advantage of convenient online banking tools can help Canadians of all ages understand the strategies available to help them build long-term wealth and make real financial progress throughout periods of uncertainty.”
Weathering The Storm
The survey also explores how Canadians’ concerns about current economic conditions, most notably inflation and rising prices, will affect their approaches to financial planning. Concerns about their financial situation continue to be the leading source of financial anxiety (78 per cent) and a quarter (25 per cent) of Canadians feel less financially secure today than they did in 2022.
“Although CPI inflation has fallen sharply from a four-decade high above 8 per cent in mid-2022 to just over 3 per cent in July, it will likely decline more slowly going forward given upward pressure stemming from wages and rents,” said Sal Guatieri, Senior Economist, BMO. “Consequently, while the Bank of Canada may not need to raise its policy rate further from the current 22-year high of 5 per cent, it is unlikely to start lowering borrowing costs until next spring.”
Despite current concerns about the economy, half (51 per cent) of Canadians believe they are making real financial progress and 72 per cent remain optimistic about their financial future for the next year. Their top financial goals include saving for retirement (60 per cent), a vacation (51 per cent), and paying down debt (38 per cent).
Scoring Offline Goals With Online Tools
While over two thirds (68 per cent) of Canadians have set financial goals, far fewer have a household budget (38 per cent), a written financial plan (31 per cent), or a professional financial advisor (43 per cent). With financial goals in mind, Canadians’ reliance on online banking tools continues to grow – more than half (54 per cent) believe digital banking tools and tips play an important role when making financial progress and 10 per cent rely on the guidance and advice available on their banking apps.
Notably, Gen Z (73 per cent) and younger Millennials (69 per cent) have said that they find the tips and tools available in their banking apps to be relevant to them, more than any other generation. Gen Z are also the most likely to use their digital banking app when looking for advice or guidance on their financial situation (20 per cent).
“These findings demonstrate Canadians’ appetite for personalized digital experiences that help them manage their day-to-day finances in ways that are convenient for their lifestyle,” said Mathew Mehrotra, Chief Digital Officer, BMO. “BMO is committed to meeting Canadians where they are with leading digital experiences that help them make real financial progress.”
BMO offers innovative digital tools and resources to help customers build financial literacy, monitor financial plans, and reach financial goals:
- BMO CreditView: Customers can quickly and easily check their credit scores and access new tools and advice to manage their credit profile online and on mobile.
- BMO Insights: Customers get help saving more, monitoring spending and account values, and spotting unusual activity with 25 BMO Insights that provide customers free, quick, and personalized views of their daily spending to help them make informed decisions. Popular online insights include:
- CashTrack: Using artificial intelligence, these insights monitor customers’ cash flows and let them know if they will run out of money in the next seven days.
- Spend Categorization: These insights notify customers when there has been a significant increase in a specific spending category or if a free trial has expired.
- BMO Savings Amplifier Account: To help make saving easy and automatic, BMO’s new Savings Amplifier Account offers no monthly fees, a competitive interest rate, and unlimited no-fee transfers to other BMO accounts. In addition, its digital Savings Goals feature enables customers to set, track, and manage their financial goals.
To learn more about how BMO helps customers make financial progress, visit www.bmo.com/main/personal.
About the BMO Real Financial Progress Index
Launched in February 2021, the BMO Real Financial Progress Index is an indicator of how consumers feel about their personal finances and whether they are making financial progress. The index aims to spark dialogue that will help consumers reach their financial goals and to humanize a topic that causes anxiety for many – money.
The research detailed in this document was conducted by Ipsos in Canada from June 27 to July 28, 2023. A sample of n=2,500 adults ages 18+ in Canada were collected. Quotas and weighting were used to ensure the sample’s composition reflects that of the Canadian population according to census parameters.
About BMO Financial Group
BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.25 trillion as of July 31, 2023. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to over 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society.