A recent survey shows more than 80 per cent of Canadian believe young people are ill-prepared to manage finances when they enter the workforce.
The survey, sponsored by the Canadian Institute of Chartered Accountants (CICA) and conducted by Harris-Decima in the summer of 2010, found many Canadians think those aged 18 and over are in difficult financial circumstances or making bad financial decisions.
Specifically, in terms of students, the study found that 84 per cent of Canadians believe young people are ill-prepared to manage finances when they enter the work force, and 85 per cent believe financial management skills should be taught in schools to help solve this problem.
“The problem is [Ontario Student Assistance Program] and government loans,” said Jackie DeCarlo, assistant manager at Bank of Montreal College Square branch.
“Students receive about $2,500 meant to budget for six months of books and school supplies, but the problem is that students do not always budget for the right things. Trips and entertainment is not where that money is supposed to be used.”
DeCarlo also brought up the issue of students dropping out or taking time off after using their loan money.
She said the issue becomes that all this information goes to the credit bureau.
“They were given money, didn’t pay it back, and now they can’t get a house.”
DeCarlo said it is good if students have a goal for their money.
She said she is finding this generation is learning to save more, learning from the last generation that, for the most part, are experiencing big issues with debt at the moment.
Though some students are taking the initiative and looking into savings options, there are many that have not.
The poll by CICA found Canadians believe parents or guardians have the primary responsibility for teaching their children about money and that schools should teach financial management skills, as well as the financial services industry and governments.
This may prove to be a more effective option, as the poll of more than 1,000 Canadians found 78 per cent of Canadian parents have attempted to teach their children financial management skills, but almost two-thirds believe they have not been very successful.
“I think it could be beneficial for schools to teach students because students spend a lot of money,” said Alex Smith, a third-year commerce student at Carleton.
DeCarlo said it is especially important for students to learn to save and manage money, especially when saving for school.
“That’s when the real world hits these students . . . do I buy food or pay for a book?”