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Nov 2, 2011

Youth expecting to earn more than $70,000 per year by age 30: Report

Comprehensive financial literacy needed at post-secondary level
    
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High school graduates are highly optimistic about their financial futures. On average, students expect to earn more than $70,000 in 10 years' time (more than double the reported income of Canadian post-secondary graduates 10 years their age), according to the National Report Card on Youth Financial Literacy released by the British Columbia Securities Commission (BCSC).

More than 90 per cent of the 3,000 17- to 20-year-olds surveyed were enrolled in post-secondary courses.

The study surveyed the impact of financial literacy courses on high school graduates. Students who took comprehensive financial literacy courses and had good experiences taking them performed better overall on financial literacy outcomes. The survey also showed that simply having taken a financial literacy course has little impact on these outcomes and having a bad course experience is the same as not having taken a course at all.

"This information points to the importance of how financial life skills are taught in our secondary schools. The study tells us that the more comprehensive a course is and the better taught, the more likely students will have higher scores on financial attitude, behaviour and knowledge," said BCSC Chair, Brenda Leong.

The study included a financial literacy test. British Columbia and Alberta performed higher than the national average. Forty-two per cent of B.C. graduates scored an "A" or higher followed by Alberta graduates at 37 per cent, above the national average of 35 per cent. One explanation for this result is the fact that B.C. and Alberta both have comprehensive financial life skills courses in their high school curriculum.

On the important matter of student debt, the survey showed that more than one-half of the respondents carry debt, which for nearly 70 per cent includes a student loan.

And while one-half say they plan to pay it off in five years, the numbers tell a different story. Student debt has reached a record-high of nearly $15 billion, according to 2010-2011 actuarial report released by the federal government.

"The financial realities that we face as Canadians indicate that there is a lot at stake in educating young Canadians to be financially prudent,” said Leong. “We need to build on the momentum created by the Taskforce on Financial Literacy and become global leaders in graduating students who are not only well versed in languages and mathematics, but in personal financial management as well."

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