From Canada Dot Com

More young Canadians have credit cards and they know how to use them. Joanne Laucius reports the shocking numbers about their spending

By Joanne Laucius, Postmedia NewsFebruary 2, 2011

Seventy-two per cent of Canadians between the ages of 18 and 29 had credit cards, 28 per cent had student loans and 22 per cent had a personal line of credit, according to a 2008 Environics research paper for the Financial Consumer Agency of Canada.

The study, which was based on 617 telephone interviews and 2,501 online surveys, found that 11 per cent had used cheque-cashing services over the past year while seven per cent had used a payday lender and five per cent had used a pawnbroker.

Here are some more findings from the Environics study:

* A little over a third of the respondents said they regularly set aside money for the future, while almost as many said they do it sometimes. One in 10 had savings or investments totalling $20,000 or more. Four in 10 said they didn’t know or wouldn’t divulge how much they had invested or saved.

* Six in 10 reported they had debt, with almost two-thirds of those reporting they had credit card debt, and 44 per cent saying they had student loans. Of those with student loans, 37 per cent owned $10,000 or more and 17 per cent owed $20,000 or more.

* About a quarter of young Canadians had taken a course or training session on personal finance, mostly at school.

A December 2009 online survey of 1,000 teens and 1,000 parents of teens for the Canadian Bankers Association found that almost a third of the parents who responded said it is “very important” to have a good understanding of money use and financial matters, while only 45 per cent of teens said it was very important.

Other findings from the report, called Financial Literacy: Teens and Parents:

* 64 per cent of parents said their teens had a good or very good understanding of money and managing financial matters while 68 per cent of teens agreed.

* Half of the teens had a part-time job, but three-quarters earned less than $200 a week.

* 29 per cent of the teens reported getting an allowance; 47 per cent got money from their parents if they needed it; 56 per cent got money as gifts or presents and 12 per cent got money from investments or trusts.

* While almost three-quarters of the parents said they were a source of information about money management, only 65 per cent of the teens identified their parents as a source of money information and only about a third of teens said parents were the best source of information.

* 84 per cent of both the teens and the adults said parents were good or excellent money managers.

- Source: The Canadian Bankers Association report Financial Literacy: Teens and Parents, December 2009, based on an online survey.

Ottawa Citizen

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