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Financial Literacy: Millennials Are a Wake-up Call to Build a Strong Foundation

Beata Caranci, SVP & Chief Economist | 416-982-8067

James Marple, Director & Senior Economist | 416-982-2557

November 18, 2016 |


  • The need for strong financial literacy skills has never been higher. With record-low interest rates, household debt levels have grown faster than income, taking household leverage ratios to record highs. This debt accumulation has been positive, allowing for an expansion in homeownership for young and old alike, but it also has raised the vulnerability to changes in financial conditions. 
  • Nowhere is the need more pressing than among millennials. Even before leaving secondary school, young people have bank accounts, debit cards and smart phones that give them access to financial products with the mere touch of a button. Despite higher levels of educational attainment, most young people do not know how much they need to save for retirement. 
  • Higher levels of post-secondary participation are not sufficient to ensure that young people have the financial capability necessary to navigate the brave new financial world. Building a foundation in financial literacy must begin even before adulthood. Skills learned at an early age should be reinforced so that by the time major financial decisions must be made, young people are ready for them. 
  • In order to prepare young people for financial decisions throughout their lives, financial education should be incorporated in the K-12 curriculum in elementary grades and competencies built up year after year, as they are with basic numeracy and literacy. In later grades, these can be expanded upon with applied courses that cover more specific financial and economic concepts.

 Full report in PDF format is available here.