When I see all of the financial opportunities for young people to access today compared to when I was growing up, I’m amazed at the differences.  Unfortunately most of the youth today aren’t taking advantage of all of the programs that are available to them.

Financial Opportunities Back Then

I graduated from high school at the age of 16 and promptly moved away from my parents’ home.  I rented an apartment and furnished it with hand-me-downs and built stands and bookcases from boards and cinder blocks.  While attending university, I worked at a music company (sadly, I wasn’t the talent) and earned enough to pay my bills and weekend entertainment.

Financial opportunities were limited at that time for ordinary folks like me, but I did have a savings account at my local bank.  My savings goals were pretty short term – a new leather coat, a few days vacation, that kind of thing.  It just felt good to have some cash of my own.

CPP was introduced in 1965 so that would take care of my needs when I reached retirement age but it was not something that ever crossed my mind.  After all, that was for old people (like my parents!).

Today’s Youth and Finances

Fast forward 40 years or so.  Many young adults live with their parents to help finance education while attending post secondary school and even into their early employment years.  It’s not unusual to see adult children living with their parents well into their late twenties or early thirties.  They want to be financially secure before going off on their own.

A greater portion of their earnings can be saved for a variety of purposes, especially if Mom and Dad are covering most of their living costs.  (Parents who allow their adult children to party their money away while living with them aren’t doing them any favours.)

Financial Opportunities Available Now

Unlike in my own youth, there are now a variety of ways to invest and reduce taxes at the same time.  Savvy teenagers who work part-time file tax returns to build contribution room for tax advantaged investments not available in my early years.  Very few single young people think much about retirement.

However, overpayment of taxes over a longer period of time and missing out on refundable tax credits by not filing a return results in missed lucrative investment opportunities that can’t be reversed.

Topping up RRSP and TFSA contribution room in the first half of life can result in a huge financial gains because of the “age advantage” of accumulating tax sheltered compounded earnings over a longer time horizon.

Then it gets even better.  Money saved in an RRSP can be removed tax free to finance the purchase of a first home or can pay for post secondary education.  (Remember though there are certain repayment obligations for the funds to remain tax deferred.)

Lifetime tax-free savings in a Tax Free Savings Account.  RRSP contributions to reduce taxes paid and increase monthly cash flow from tax credits, fund retirement savings, home buying and education goals too.  How great is that!

What I could have done with my life if I would have had those financial opportunities.


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