ANALYSIS OF FACTORS THAT INFLUENCE FINANCIAL LITERACY OF MILLENNIALS IN CANADA

Varinder Gill; Fuk Chang Li; Charles Matovu

doi:10.20472/ES.2020.9.1.005

Authors

Varinder Gill Seneca College of Applied Arts and Technology, Canada Author
Fuk Chang Li Seneca College of Applied Arts and Technology, Canada Author
Charles Matovu Royal Bank of Canada, Canada Author

DOI:

https://doi.org/10.20472/ES.2020.9.1.005

Keywords:

Financial Literacy, Financial Goals, Financial Resources, Financial Advice, Financial Products, Financial Commitments, Alternative Financial Services, Millennials

Abstract

Financial literacy has been recognized as a key skill that equips individuals with the knowledge to manage their financial resources effectively, especially in an increasingly complex financial environment. Despite its significance, studies worldwide indicate that a large portion of the population still suffers from financial illiteracy, and that measures to address this issue are urgently needed. This research focuses on millennials, who represent the largest component of the labor force in Canada, and notes that, as of 2012, Canadian households under the age of 35 held over 824 billion in assets. Millennials are vulnerable to higher-than-average levels of dissatisfaction due to unrealistic financial goals. Despite their relatively strong earnings, they often lack money management skills. Their behavior toward financial literacy may significantly affect the economies and societies in which they live. This study identifies the factors motivating millennials to become financially educated and explores the most effective ways to disseminate financial education among them. Moreover, the research examines the sources from which millennials obtain financial information and analyzes the factors influencing the perception of financial literacy among low-income millennials compared to middle-income groups. Based on the data analysis, we conclude that millennials’ perception of being fairly knowledgeable may actually hinder their financial literacy. Financially empowered Canadians can reduce the burden on the social safety net and better plan for their future. Although several programs have been launched by governments and other organizations in Canada, financial literacy remains a widespread problem. This research suggests further studies on financial literacy among younger populations and millennials to enable timely action in preparing them for future financial challenges.

Data:
Received: 9 Mar 2020
Revised: 3 May 2020
Accepted: 6 Jun 2020
Published: 20 Jun 2020