Promoting economic inclusivity are ways to contribute to positive financial changes in the Caribbean community

BY SIMONE J. SMITH

How much of a difference does your upbringing make to your life? It’s a question that’s been debated for ages and, in a world with a greater focus on equity, the wealth gap within society is under the microscope.

Compare the Market AU has done a survey of more than 1,000 Canadians to ask questions about their upbringing, financial education and habits, social class and home ownership. Now, I am not sure the demographics of this research, but it did make me think; how much are we (the Caribbean community) represented in these numbers?

The survey revealed a good degree of class mobility, with 32.8% of Canadians who said they grew up working class now identifying as middle class.

Additionally, younger generations were more likely than previous generations to say they were raised upper class. While only 0.4% of Canadians aged 58 and above said they had an upper-class upbringing, this rose with each subsequent generation up to 10.8% for 18–25-year-olds. Research indicated that:

• Younger generations are more likely to be born upper class than older generations
• Almost one third of Canadians consider themselves serious savers
• Over 40% of half of upper-class Canadians own a home, compared to less than a quarter of the working class

Upbringing can have a big impact on how people handle money as an adult:

• 6% received helpful lessons on money from their parents
• 7% said their parents taught them, but it wasn’t helpful
• 3% said their parents didn’t teach them and they had to learn in other ways
• 4% never received lessons from their parents on money and they still struggle today

This is where we as a community really need to focus our attention. Today, almost 40% of Canadians say they budget to save and spend on what they want, while almost a third (32.3%) consider themselves serious savers, rarely spending money on things they don’t seriously need. Over one-in-ten were impulse buyers (12.0%). Worryingly, a further one-in-ten said they rarely had savings and spent beyond their means (13.2%).

When it comes to home ownership, just under 60% of our survey respondents who were 18–25-year-olds were non-homeowners while just over 41% were homeowners (either with a mortgage or owning outright), but this changed with over 50% of 26–41-year-olds owning a home vs 47% who didn’t. Older generations were even more likely to be homeowners, with over 65% of those aged 58 and above being homeowners.

Of course, on one hand, this is to be expected. The older you are, the more time you’ve had to save up money for a house. The problem is that house prices have outstripped wage growth, so those dreaming of owning a home are chasing a goal that’s getting further away from them every year.

This is where wealth (and family financial support) can make a big difference in home ownership. In Canada, 63.1% of the working class didn’t own a home, compared to 42.5% of the upper class and 37.5% of the middle class who owned, with a mortgage.

The data shows that many Canadians have been able to work their way up the social ladder by having helpful guidance in childhood or educating themselves about money, but it isn’t always easy. As Stephen Zeller, General Manager of Money at Compare the Market notes, knowledge can be the difference between sinking and swimming in an economy that seems to be set on inflation.

“There are some great resources out there to help people get a better understanding and manage their finances. Saving even just a small amount in terms of your interest rate can save you thousands of dollars over the course of the loan.”

Promoting financial literacy and empowerment within the Caribbean community can be a positive step toward fostering a healthier relationship with money. Encouraging open discussions about financial matters, providing access to education and resources, and promoting economic inclusivity are ways to contribute to positive change.