By Monica Gutschi
Of DOW JONES NEWSWIRES
TORONTO (Dow Jones)--Stacey Bowman believes she's typical of her generation. At 28, she's single, in graduate school, deeply in debt and convinced her lifestyle will be quite different from that of her parents. She also knew little about budgeting, investing, or the benefits of starting to save early. "Money is still a bit of a taboo subject," the University of Toronto student says. "You don't talk about it in your family, or among friends. That needs to be changed." Bowman is helping make that change. As a youth finance blogger for the Investor Education Fund, she is sharing her experiences with other members of Generation Y, otherwise known as the children of the baby boomers. This demographic comprises about 7.5 million Canadians, says noted demographer David Foot. That makes it the second-largest group in the country after the 10 million baby boomers, and a growing economic force. Foot, who refers to this group as the "echo" generation, says Bowman and her peers are wrong when they say they will never be as well off as their parents. Sure, the majority are in debt, but so were their parents at the same age. "She's comparing her experience today with her parents' experience today," he says. "She's not comparing her experience with when they were the same age as her." He says every generation follows more or less the same pattern: Most people have the heaviest debt loads in their late 20s and early 30s as they complete their education, buy homes and form families. The "echo" generation is "doing exactly what they should be doing," he says. "They're accumulating assets." And, he says, this particular group will do quite well as they are likely to be in their late 30s--and thus in the prime employment years--just as the bulk of baby boomers are retiring. The first of the baby-boom generation began turning 65 this year. Moreover, history is on their side. "Generally there are rising incomes over time," he says. "Each generation does slightly better than its parents." Jack Mintz, director of the University of Calgary's School of Public Policy and a noted pension expert, agrees. "When they are young, people buy a house and then they pay the mortgage," he says, noting the average debt burden for Canadians under the age of 65 is C$165,000. The burden falls to C$11,000 on average for those over 65. Statistics Canada data back them up. Only 30% of Canadians between the ages of 20 and 29 own a home, and of those who do, 87% have a mortgage. Average equity in their homes is around 40%. However, home ownership rises sharply among Canadians 30 to 39. Of that group, 61% own a home and 88% of those homeowners have a mortgage. Average equity is around 45%. The highest level of home ownership is among those 50 to 59, at 78%. Meanwhile, overall home-ownership rates are on the rise. During the 1970s, when the baby boomers were in their late 20s and early 30s, about 60%-64% of Canadians owned their own homes. But that percentage has been rising since the mid-90s and currently stands around 69%. Income follows much the same pattern. According to Statistics Canada, the average after-tax income of those 20 to 29 is C$43,506, below that of every other adult age group except those above 70. Income was highest in the 50-to-59 group, at an average C$67,553. As for the echo generation knowing little about finances, Foot says not much has changed there either, arguing few people pay much attention to retirement or budgeting until they have begun working, buying homes and having families. Although the echo generation tends to stay in school longer, remain in their parents' home longer, get married later and begin having children later--pushing out their timeline a few years--Foot notes that people are living longer, too. Canadians aged 30 today have a life expectancy of 72 if they are male and 78 if they are female; whereas the baby boomers had average life expectancies at birth of 64-68 for males and 72-75 for females.
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