Get money-saving tips in your inbox.

Stay on top of personal finance tips from our money experts!

News & Resources

What Your Age Says About Your Savings Habits

Jan. 17, 2013
2 mins
Grown man and father enjoying time together in candid portrait

Each generation has experienced its own series of economic challenges - but to what extent do these conditions have on a demographics mindset towards personal finances?

As it turns out, quite a bit. TD Canada Trust and Dr. J Bruce Morton at Western University Canada’s Department of Psychology recently studied generational attitudes towards savings habits – from the Baby Boomers to Gen Xers and Millennials – in hopes of offering advice to help guide future savings efforts.

“While every person makes decisions based on what makes the most sense from their vantage point – specifically how to maximize gains and minimize losses – what seems reasonable to some individuals may not be reasonable to others,” says Morton. “This decision-making process is influenced by the generation to which we belong, and the corresponding cultural and economic factors that make the future appear differently to us.”

John Tracy, senior vice president of TD, says knowing those influences can help shape financial planning habits.

“Understanding what motivates your generation to save can help identify useful financial planning strategies for each stage of your life,” says  Tracy. “Regardless of your life stage, knowing how much you will need to retire is essential to managing your money and being prepared financially for the future.”

Living in turbulent times: Millennials  (1982-1999)

As a generation raised in the age of information, the Millennials are no strangers to the challenges faced by the continuous economic turmoil.

“Perhaps the defining factor for the Millennial generation is persistent economic uncertainty,” says Morton. “Faced with job market challenges and an uncertain economy, Millennials may find it difficult to envision a concrete future, making saving for the long-term seem less reasonable.”

According to the study, 65% of Millennials “continually feel they are spending too much money (compared to 56% of Gen X and 44% of Boomers). Given the endless access to information this generation has been raised with, it should come as no surprise that 55% feel there is more they need to know savings and investment options (versus the more informed Gen X and Boomers, 51% and 45%, respectively).

The Millennial savings strategy

Try setting up an automated savings plan that invests a set amount at regular intervals into an RSP. As your income grows, you can adjust your contribution amounts.

“With time on your side, saving even a little regularly can add up, while allowing you to take advantage of compound interest,” adds Tracy.

Breaking away from tradition: Gen Xers (1965-1981)

Having lived through a time of “unprecedented economic transformation” including greater fluidity in the job market and the elimination of mandatory retirement, it’s no surprise the Gen Xers surveyed showed the most competing views when it comes to finances.

“These larger economic forces have led to a shift away from traditional notions of career and retirement,” says  Morton. “As a result, many Gen Xers anticipate working well into traditional retirement years, undermining the incentive to save for the long-term.”

Torn between saving for retirement (55%), paying off mortgages (44%), paying off loans (38%), paying down credit card debt (37%) and tucking away an emergency savings fund (37%) – 70% of those surveyed say they continually feel they are not saving enough.

The Gen X savings strategy

With less time to build a comfortable nest-egg for retirement, it’s imperative that Gen Xers find a way to contribute regularly to their retirement savings during peak income earning years – even if that means finding ways to cut back on day-to-day expenses.

“As a general rule, Gen Xers should aim to save enough to have 60 per cent to 80 per cent of their annual working income per year to live on during retirement if they don't want to change their lifestyle,” says Tracey.

Historically thrifty: the Baby Boomers (1946 - 1964)

Ah, the post-war generation – raised by thrifty depression-enduring parents during a period economic affluence and employment stability.

This strong start is reflected in a general sense of confidence among boomers - 79% said they feel good about how they are managing their money. However, 56% still reported feelings of worry over their saving habits as they stand on the cusp of retirement.

“As a Boomer, even if saving for the future is a top priority, it's equally important to know how much you realistically need to save and whether you are on track to reach your goal,” says Tracy. “Compare your goal to the income you will have from your current savings to determine how much more you need to save.”

Baby Boomer savings strategy

Tracy reckons it’s time to get a financial advisor to hash out a realistic plan that “includes lowering or eliminating debt prior to retirement to free-up income during this stage in your life.”

Getting a handle on your finances at this stage is directly related to your lifestyle in the coming years.

Andrew Seale

Andrew Seale is a freelance writer with an absurdly hyperactive mind and predilection towards the obscure and eclectic. He frequently shares his personal finance experiences and mishaps with TheDot readers but has also been known to profile business leaders ranging from financial savants to bootstrapped entrepreneurs. His work has appeared in the Globe and Mail, Yahoo Canada Finance and News, Profit Magazine, The Toronto Star, Enroute Magazine, and on the back of napkins sometimes tucked into the pockets of strangers. He can be found at

Latest life insurance articles

10 Life insurance myths debunked
Life insurance is for someone older or has kids, right? Wrong. Let’s debunk life insurance myths and learn why everyone needs some form of coverage.
6 mins read
Do you need life insurance? A primer for Canadians
Life insurance isn’t a one-size-fits all solution. But if you have dependents, it can be an important financial safety net for those you love.
7 mins read
Why life insurance should be part of estate planning for new parents
Life insurance is one of the best ways new parents can protect their family and help loved ones in the event of your unexpected death.
5 mins read

Subscribe to our newsletter

Stay on top of our latest offers, relevant news and tips!

Thanks for joining!

You'll be hearing from us shortly - stay tuned.