Investment advice and side hustles top of mind as Gen Z and Millennials seek greater financial security: BMO Survey

This quarter’s BMO Real Financial Progress Index reveals young Canadians are increasingly seeking guidance on side hustles, how to grow their money and achieve financial security amid concerns about rising interest rates, inflation, and economic uncertainty. Among personal finance topics, the survey found Gen Z (ages 18 to 24) and Millennials (ages 25-44) are most interested in learning how to grow the money they have and diversify their sources of income:  

• Financial anxiety: Concerns about their overall financial situation are the leading source of financial anxiety among Gen Z (90 per cent), as well as younger (ages 25 to 34) (88 per cent) and older (ages 35 to 44) (86 per cent) Millennials.  
• Learning to grow: Younger Millennials are the most likely generation to seek advice on how to grow the money they have (56 per cent), followed by Gen Z (47 per cent) and older Millennials (47 per cent).  
• Passive income for an active generation: Nearly half of Gen Z (46 per cent), as well as younger (46 per cent) and older Millennials (50 per cent), are interested in advice on investment strategies. 
• The side hustle generation: Nearly half (48 per cent) of younger Millennials are looking for more information on how to generate other sources of income, followed by Gen Z (40 per cent) and older Millennials (36 per cent). Only 23 per cent of Gen X (ages 45 to 54) and 15 per cent Boomers (ages 55 to 64) are looking for more information on side hustles. 

• Embracing entrepreneurship: In the last six months, one in five (20 per cent) Gen Z are in the process of switching jobs and 12 per cent started a business.  

• Financial confidence with advice: Over two thirds (68 per cent) of Gen Z believe a financial advisor is important to helping them reach their financial goals – more than any other generation.   

“As many young Canadians begin managing their own finances for the first time, they recognize the importance of budgeting, tracking spending, investing, and putting their money to work to allow their savings to grow and outpace inflation. While the current interest rate environment and the rising cost of living has been challenging, working with a professional and taking advantage of convenient online banking tools can help Canadians of all ages understand the strategies available to help them build long-term wealth and make real financial progress throughout periods of uncertainty.” 

– Gayle Ramsay
Head, Everyday Banking, Segment & Customer Growth, BMO

Weathering the storm   

The survey also explores how Canadians’ concerns about current economic conditions, most notably inflation and rising prices, will affect their approaches to financial planning. Concerns about their financial situation continue to be the leading source of financial anxiety (78 per cent) and a quarter (25 per cent) of Canadians feel less financially secure today than they did in 2022. 

“Although CPI inflation has fallen sharply from a four-decade high above 8 per cent in mid-2022 to just over 3 per cent in July, it will likely decline more slowly going forward given upward pressure stemming from wages and rents. Consequently, while the Bank of Canada may not need to raise its policy rate further from the current 22-year high of 5 per cent, it is unlikely to start lowering borrowing costs until next spring.”

– Sal Guatieri
Senior Economist, BMO

Despite current concerns about the economy, half (51 per cent) of Canadians believe they are making real financial progress and 72 per cent remain optimistic about their financial future for the next year. Their top financial goals include saving for retirement (60 per cent), a vacation (51 per cent), and paying down debt (38 per cent). 

Scoring offline goals with online tools  

While over two thirds (68 per cent) of Canadians have set financial goals, far fewer have a household budget (38 per cent), a written financial plan (31 per cent), or a professional financial advisor (43 per cent). With financial goals in mind, Canadians’ reliance on online banking tools continues to grow – more than half (54 per cent) believe digital banking tools and tips play an important role when making financial progress and 10 per cent rely on the guidance and advice available on their banking apps.  

Notably, Gen Z (73 per cent) and younger Millennials (69 per cent) have said that they find the tips and tools available in their banking apps to be relevant to them, more than any other generation. Gen Z are also the most likely to use their digital banking app when looking for advice or guidance on their financial situation (20 per cent). 

“These findings demonstrate Canadians’ appetite for personalized digital experiences that help them manage their day-to-day finances in ways that are convenient for their lifestyle. BMO is committed to meeting Canadians where they are with leading digital experiences that help them make real financial progress.” 

– Mathew Mehrotra
Chief Digital Officer, BMO

Read the full press release here: Canada/U.S.