Explore how upbringing affects finances and class mobility in Canada, from saving habits to homeownership
A survey conducted by Compare the Market AU delves into the nuances of the wealth gap within Canadian society, offering a multifaceted view of class mobility, financial upbringing, saving habits, and the state of home ownership.
Engaging over 1,000 Canadians, this survey sought to uncover the impact of one's upbringing on their financial health and social class trajectory.
One of the standout revelations is the substantial class mobility experienced within the populace, with 32.8 percent of participants who identified their childhood environment as working class now classifying themselves as middle class.
This shift is particularly pronounced among younger Canadians, with the survey documenting a notable increase in individuals reporting an upper-class upbringing across successive generations.
While a mere 0.4 percent of those aged 58 and above acknowledged an upper-class background, this figure escalates to 10.8 percent among the 18–25-year age group.
The influence of parental financial education emerges as a critical factor in shaping adult financial behaviors. According to the survey, "34.6 percent received helpful lessons on money from their parents," contrasting with 19.7 percent who deemed their parental financial guidance unhelpful.
A considerable 37.3 percent had to seek financial knowledge outside of their family environment, and 8.4 percent lamented the absence of any financial education during their upbringing, a deficiency they continue to grapple with.
In terms of saving habits, the survey paints a picture of a budget-conscious nation, with almost 40 percent of respondents adhering to a budget that accommodates both savings and discretionary spending.
Nearly a third, or 32.3 percent, identify as ‘serious savers,’ prudently managing their finances to avoid unnecessary expenditures. On the other side, impulse purchases are the norm for 12.0 percent of those surveyed, and a concerning 13.2 percent admit to habitually spending beyond their means, often without the safety net of savings.
Homeownership remains a pivotal aspect of financial stability, yet its accessibility is markedly stratified by age and class. The survey indicates that homeownership among 18–25-year-olds stands at just over 41 percent, with this rate increasing to more than 50 percent among individuals aged 26-41.
This trend underscores the accumulating difficulty of achieving homeownership, exacerbated by a housing market that increasingly outpaces wage growth.
The disparity in homeownership extends across social classes, with 63.1 percent of the working class not owning a home, in stark contrast to 42.5 percent of the upper class and 37.5 percent of the middle class who have managed to secure homeownership, often with the aid of a mortgage.
Stephen Zeller, general manager of Money at Compare the Market, emphasizes the pivotal role of financial knowledge in navigating these challenges. “Knowledge can be the difference between sinking and swimming in an economy that seems to be set on inflation," he notes, advocating for the careful comparison of interest rates as a strategic move for prospective homeowners.
“Saving even just a small amount in terms of your interest rate can save you thousands of dollars over the course of the loan,” Zeller advises.