40% This is the percentage of young people, ages 18 to 24, who failed miserably on a basic financial questionnaire, according to a study published today. Taxes, duties, TFSA… these key terms are Chinese for you.
“It’s quite dramatic,” sighs Jean-Philippe Laforge, co-founder of the exchange platform between clients and finance professionals Welcome Spaces, who interviewed 1,000 people aged 18 to 44 online to get the pulse of the younger generation’s situation.
“As an entrepreneur and father, I’m concerned that we are educating the financially illiterate because financial decisions accompany the most important moments in life,” he notes.
Buying a property, investing, planning for retirement… you have to have this basic knowledge, argues Jean-Philippe Laforge, also founder of mobile sales assistance solutions Beehivr.
Earlier this month, Le Journal met young people who fear for their financial future.
Last Wednesday, Le Journal told the story of a nurse who, with iron discipline and by surrounding herself with experts, manages to save more than 60% of her salary.
However, the study published this Thursday shows that many of them often simply do not master basic concepts.
Learn at work
For Nathan Marcoux-Racicot, 22, a car wash technician who entered the job market after third secondary school, he had to learn on the job. According to him, the lack of financial literacy is a “serious problem”. “The big issue is money,” he says.
“I don’t make a huge salary, but instead of going to a restaurant every Friday with a $150 bill, I eat at home and it’s $30. I live with what I can afford,” explains the disciplined youngster Man from Saint-Eustache.
“What drives the world is money, it’s a pity it’s not developed in school,” adds the one who also manages to invest through his own motivation.
More than 80% of youth surveyed by Welcome Spaces say they are dissatisfied with financial education at school.
170 miles away, in Quebec, Laurent Côté-Dufresne, 22, a finance student at Laval University, agrees.
Laurent Côté-Dufresne Provided by Laurent Côté-Dufresne
“The implications of taking the course before age 18 are significant. You have to take responsibility and know the most advantageous options,” he summarizes.
“It’s really important to know the best investment plans at the X point in your lifecycle,” he says.
fear and denial
What also worries Jean-Philippe Laforge, who led the investigation, is to see the extent to which insidious denial has crept into the minds of many Quebecers. The brushed portrait shows that some tend to bury their heads in the sand.
“The least concerned are those who know the least. However, the less they know, the worse it gets,” he analyses.
Overall, 51% of men and 59% of women even admitted to experiencing financial anxiety.
The less they know about tax benefits and fiscal strategies, the poorer they become and pay the price for these deficits.
Financial Literacy Indexes
5 example quiz questions with wrong answer rates
- What is the minimum down payment percentage for a house? 41%
- What is the consumer price index (CPI)? 47%
- What is the Quebec Pension Plan? 34%
- What is compound interest? 32%
- What is a car insurance deductible? 26%
Average determined in the financial questionnaire: 62%
More study results
Dissatisfied with financial education at school
Do you feel financial anxiety
Do not understand the basic rules of goods tax
Credit card payment not possible
- 45% of women
- 31% of men
Source: Welcome Spaces study
Methodology: 1,000 online people aged 18-44, plus or minus 3% error rate
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