The white collar job has long been heralded as the golden standard of success. Post-secondary education, now commonly accessed in Canada, has become a societal rite of passage, and one widely accepted as a key step toward enhancing career opportunities.
Yet job prospects for Canada's highly educated youth are slim, the competition stiff, and professional development opportunities continue to erode. Add to that the shifting perceptions of what constitutes "ideal" work -- with youth often ranking things like social impact and work-life balance higher on their list of career priorities than financial security -- and it seems it might be time to update our thinking.
For over two decades, the proportion of young adults accessing post-secondary education has steadily climbed upward, from 25% in 1990 to 37% in 2009, with peak enrollment predicted in 2013. While educational achievement among youth soars, the same cannot be said for increases in job quality. The result? Disillusioned graduates facing the reality that a degree may prepare one for a challenging and meaningful career, but does not entitle one to it.
In an economy in which employment is increasingly scarce, Canadian youth need hard and soft skills to create their own opportunities.
"Adaptability, resourcefulness, creativity, and drive for innovation are essential attributes that are seldom honed exclusively in the classroom," says Elly Adeland, Director of Operations with The Otesha Project, the youth led non-profit where I work as Communications Co-Ordination. The Otesha Project combines experiential learning and bicycle tours to foster personal and professional development among participants.
Igniting a spirit of social entrepreneurship (enterprises that contribute to greater social and economic well being) is one tactic volunteer-based organizations like ours are using to address Canada's high youth unemployment. The Otesha Project offers a unique brand of skills development, organizing volunteers to set out on pedal-powered tours to deliver sustainability education in schools across the country. Living as a mobile community, participants refine their public speaking, networking, and problem solving skills, often returning home energized to start their own social enterprise.
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Generation Y gets a bit of a bad reputation for not being able to handle their finances, but it may be a reputation that is deserved. Here are 10 things that millennials are doing wrong with their money and how they could do better.
A <a href="http://www.cica.ca/about-cica/media-centre/item52894.pdf">survey</a> from the Canadian Institute of Chartered Accountants (CICA) shows that many young people think they are super savvy when it comes to their money. CICA spokesperson Nicholas Cheung says that view may not be justified. “A lot of them say that they’re confident in their abilities to budget or manage their spending, but many of them don’t even have a budget or don’t keep track of their spending,” he said. Instead, realize your limits and recognize that there are many things that you don’t know, and that’ll send you on the path of learning. So the next time someone comes up to you and asks, “What’s a dividend payment?” or “How do banks calculate interest rates?” you’ll have an answer to give them.
Millennials are bad at the latter. Don’t worry, you’re not alone. A study by Visa Business Insights in August showed millennials becoming the fastest growing demographic in luxury spending. We’re snatching up those high-fashion products, travelling to far flung places and eating out on the regular, but what we’re not doing is saving our money, and that, says Tom Hamza, president of the Investor Education Fund, is a mistake. “Managing your financial situation is a lot like losing weight,” Hamza said. “It’s really easy to eat more and indulge yourself, just as it’s easy to put on more debt. But the thing is, trying to take control of the situation takes a lot of discipline.”
Do you have any idea about the state of your parents’ finances? Apparently, neither do a lot of other people. The first step to knowing how to manage your money is to know about the money models around you, and who is closer than your parents? Talk to your family and learn their mistakes and their successes – they do have useful things to teach you, really! Unfortunately, they are just not very good at getting all that knowledge they have to you. CICA’s survey found that two-thirds of parents felt they were teaching badly and wanted to be able to teach better. CICA’s Nicholas Cheung says that “[t]hose parents who are most successful at teaching their kids about financial management skills are the ones who talk to their teenagers about the family’s financial situation and how they manage their own money.” So it may be up to Generation Y to do a little bit of the legwork and actively try to understand the family’s finances.
Credit and debit cards are so ingrained in our financial interactions that sometimes we forget about ever carrying cash at all. Well, don’t, says Teacher Man, the pseudonym of a Manitoba high school teacher who writes on the popular finance blog, <a href="http://youngandthrifty.ca/">youngandthrifty.ca</a>. Using cards to pay for all your purchases makes it that much easier to spend, and much easier for you to lose track of exactly how much money is coming out of your account. Cash, on the other hand, will always give you a bad wakeup call when you open up your wallet to find it empty. So if you realize that you really need to get serious, hide those cards somewhere you can’t reach them.
It can sometimes be easier to reward ourselves with a venti Starbucks drink after a long day’s work or to splurge on that new must-have item. But paying down your debt with whatever money you have is one of the only ways you can ensure a solid financial future. “We’re a generation that continues to accumulate debt without paying it down,” said Lesley Scorgie, millennial author of <em>Rich by Thirty</em>. “I think this generation has become a little too comfortable with carrying debt, whereas the previous generation, people were very interested in paying it down as soon as possible.” Go without the drink and choose to be debt-free instead – you’ll thank yourself in the future.
Many would-be students, says finance blogger Teacher Man, aren’t looking at what the job market is like and how high the post-graduation salaries are before choosing a program. Although it’s good to follow your dreams, he says, it is also good to inject some practicality into it. Don’t take out $100,000 in student loans when you know that the demand for jobs in your field isn’t very high, Teacher Man recommends.
Students are flocking to find work in large urban centres, but cities are having trouble finding work for all of them. “They have to be willing to move to where the jobs are,” said Teacher Man. If you hear of a job opening, even if it’s in a not so attractive area far from the conveniences of urban life, that has to be the choice you’re willing to make, he continues. Jobs won’t come running to you – but at least you can run to them. Pictured: The boom town of Fort McMurray, Alberta, where oil industry jobs are plentiful.
You’re out of school and unemployed or stuck in a job you’re overqualified for – but you still have all that money you have to pay back. Now what? One piece of advice is to not get discouraged. Says Lesley Scorgie: “People are very demotivated by debt, and understandably so. It’s that sphere of the unknown, that they won’t be able to achieve anything because they’re so buried in debt. And that’s just a myth. You can achieve success.” When you get discouraged, it is all too easy to stop doing anything towards your financial future because you feel as though mortgages, cars and being financially independent are all non-options for you. Recognize that those goals are still in your grasp and don’t get stuck in that rut.
Too many people think that saving and investing is about having a mathematical brain, or that to actively save means dedicating most of your money to your bank account. Many millennials, says John Tracy, vice-president of retail savings and investing at TD Bank, think saving will cut into the life they want to lead, and that being financially savvy means putting away hundreds of dollars a month. Not so!. A dollar a day is all it takes. These small acts, Tracy says, build up a good habit of saving, so that in you’re better prepared to handle the larger amounts of money when it eventually comes your way.
We’ve had some of the lowest interest rates in the country for a long time, points out John Tracy. High interest rates discourage consumption, while low interest rates encourage it, and we’re in an economy of such low interest rates, he says, that “the opportunity cost to consume today, in terms of paying interest, is much less.” This, however, lulls you into a false sense of security: What’ll happen when interest rates suddenly go up? They always inevitably do. Prepare for that future and pay down the money.
At the same time, all hope is not lost. Surprise! There are things that Generation Y is doing that do make them further ahead than other generations. Check out the five things that members of Gen Y are doing right with their money.
Generation Y is definitely looking to know more, says John Tracy, vice-president of retail savings and investing at TD Bank. What he has noticed is that there is a very strong interest among millennials in doing their research online before heading into the banks, and they’ll often do it all ahead of time so they know exactly what they want. Finance blogger “Teacher Man” says that he has noticed an upwards trend in traffic to his website as his content is searched for more and more often on the web. Google Trends shows that there has been a gradual increase in searches for “pay off debt” and “save for retirement” since 2005.
Millennials are, in fact, among the most conscientious shoppers out there today, said Lesley Scorgie, a millennial who is the best-selling author of Rich By Thirty. “It’s in fashion to be frugal now,” she said. Millennials, more than any other generation, say they have or would use <a href="http://www.groupon.com/">a groupon deal</a> in order to go on their first dates. In a U.S. survey conducted by Coupon Cabin, more than 40 per cent of adults had already used groupons on their first date. “That’s a hilarious stat. It’s now become socially acceptable for this generation to be frugal.” It’s no longer a taboo thing,” Scorgie said.
Millennials, says Teacher Man, out of all other generations, value a good work/life balance, which means that they are not too obsessed about money to forget that there is a plant that needs watering. At the same time, they aren’t shirkers. Millennials understand that they need a strong financial future. If they could just get the ball rolling, they’d go far.
Generation Y is the Internet generation, and that means that more millennials are using online banking and online money management tools than ever before. “I’m a big fan of online banking, because it saves me time, which in my mind makes me more efficient,” said Teacher Man, who is at the older end of Gen Y. “I can check my balance whenever I want, and for me that makes me more effective at managing my money.” But, he said, there is definitely a worry, as automatic payments make it easy to lose track of where your money is going. In general, however, online tools mean that it is easier than ever to keep on top of your finances and make sure you never forget to pay a bill.
Being an entrepreneur is the new best thing for millennials, says Rich by Thirty author Lesley Scorgie, especially in times when earning money the traditional way is so hard. Working your way up isn’t so easy anymore, but students who are just starting out do not have experience or opportunities coming out their back pocket. “This generation is willing to try non-traditional things. One of the gals that worked for me at one point, now she’s starting a headband company after graduating and finding it very difficult to find a job,” Scorgie said. Go out on a limb, and you might be rewarded.
Another great example is the IMPACT! Sustainability Champions Trainings program provided by The Natural Step and The Cooperators. This program trains young leaders to strategically plan and design their own sustainability projects while providing participants with support and access to seed funding for their initiatives.
While Social entrepreneurship has been on the rise, social intrapreneurship has also been receiving ever more recognition. Social intraprenuers are agents of change who, rather than creating something new, work within their existing occupations, leveraging networks and resources to create positive change from the inside-out.
Creating new work is one thing, but thinking differently about existing work is quite another.
"As much as we need to shift our mindset from getting a career to making a career, we also need to transform our attitudes about existing work," says Adeland. "We need socially-minded people doing good work in the public and private sectors, and we also need to bring dignity and pride back to undervalued but essential work. A white collar job may have plenty of appeal, but professions like farming and skilled trades are sorely in need of dedicated individuals keen to contribute to social and environmental well-being."
Achieving increases in the number of youth employed with satisfying work will require a variety of strategies, with no one simple solution. However, youth creating new work that aligns with their values, or bringing their values to already existing opportunities, seem like two good places to start.
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