Canadian teenagers have an optimistic outlook on their financial future, according to a recent survey.
A study done by the British Columbia Securities Commission revealed that teenagers have high expectations for their future earnings. However, we are all aware that expectations have little to do with reality.
The National Report Card on Youth Financial Literacy survey of more than 3,000 youth, ages 17 through 20 (most of whom were currently enrolled in post-secondary education), found that Canadian youth expect to make lots of money upon graduation. The report stated that the average survey respondent expects to earn $90,735 in 10 years. That’s roughly THREE times the average income of 25 to 29 year-olds with post-secondary degrees (according to Statistics Canada’s 2006 Census Data).
Student optimism is still apparent in regard to their understanding of debt. Over half of the surveyed teenagers have stated that they already have significant debt, where most of them (7 out of 10) have hefty student loans. 27% of students surveyed owed a family member money, while another 25% had an outstanding balance on their credit card.
However, we don’t seem to be too worried. Of those who have a student loan, just about half say that they will “definitely or very likely” have it paid off in five years.
So what’s really going on here? Are we really that disconnected from financial reality? It appears that it’s a definite yes.
The easiest way to make yourself stand out from the rest of the overly optimistic, under realistic teens? Learn about money. Here are four easy tips to get you started and well on your way to financial literacy.
1. SAVE!
The thing that most thing struggle with is saving money. Practice restraint and learn to save for the large things you would want to buy later. Banks can offer you interest and you can make money off saving money so that in the end there are more benefits of not spending your money.
2. BUDGET!
Plan out your financial purchases and you’ll find quickly find that you save more money and that you’ll understand where your money goes better.
3. COMPOUND INTEREST!
Compound interest simply means that the rate at which your money earns interest increases over time. Talk to your bank about opening a savings account with this interest.
4. WATCH OUT FOR CREDIT!
Credit cards can be valuable tools in a healthy financial lifestyle, but be careful about the amount of debt that you can easily acquire.