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You had your best-laid plans and then COVID-19 came along and hammered the entire economy. But you’ve got this – if you have the right information. Join Rob Carrick and Roma Luciw on Stress Test, a podcast guiding you through one of the biggest challenges your finances will ever face.

ROMA: The downtown lifestyle means you’re living near cool stuff. You can walk to a lot of the things you want to do -- restaurants, bars, concerts, coffee shops. Your friends are nearby and so is your work. But can you afford to live the downtown lifestyle? That’s what we’re asking today.

Welcome to Stress Test, a Globe and Mail podcast where we look at how the rules of personal finance have changed in the pandemic for Gen Z and millennials. I'm Roma Luciw, personal finance editor at the Globe and Mail.

ROB: And I'm Rob Carrick, personal finance columnist at the Globe. Roma, we've done about five episodes so far. How do you think things are going?

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ROMA: I think it's getting easier and more fun with each episode. I think that the topics that we're diving into seem like a natural fit for me, I'm really enjoying it. My mother has downloaded her first podcast in her life on her iPad. So that was quite the achievement. And my two kids listen to it. The younger one was playing us back in slow motion, which was a lot of fun to listen to. And I'm not sure whether that's going to count as a listen. My older son was very interested in the making of the podcast and he was not interested in doing what you and I do, Rob. He wasn't interested in being the producer. He was really interested in the sound editing job. And he is wanting to ask TK all kinds of questions about how she makes a sound this good.

ROB: Well, when I listen to the finished product, I'm in awe of the editing job that was done here because it's taken so many threads and making a great narrative out of it.

ROMA: You can barely hear all the background noise like the construction happening next door or the garbage truck rolling outside,

ROB: Or the fire trucks going by on the main street near my condo.

ROMA: Yeah, it's all part of working at home in the pandemic. Actually, Rob will ever record this in a studio.

ROB: If the pandemic was over, and everything was back to normal. I would get in the car drive strong and we would do it there but this is a surprisingly good substitute and I have no problem with it. I mean, if we never got into the studio, I think that's great. It's you know, we're a testament to our adaptability and by the way, we just keep raising our game.

ROMA: You know what, I had been working from home for part of the week before the pandemic, but I did really enjoy going into the newsrooms for part of the week as well. And I missed the face to face interaction. That said, I think we're really into the swing of things now and I'm really enjoying the process.

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ROB: Our topic today is the cost of the downtown lifestyle. We're recording this about three and a half months into the pandemic. I was just reading an interesting factoid about how costs of downtown living have changed in the pandemic. Rents in Toronto have edged down for a few straight months. We don't know whether it's going to be a long-term trend, but in the short-term, it offers some encouragement to the many people who are struggling to pay for it all while living in downtown Toronto and in other big cities across the country.

ROMA: There’s no doubt about it. The big factor when it comes to the high cost of living in a big city has to do with your accommodation. There’s also your lifestyle, the bars, the restaurants, the gyms, going out, those are all factors, but rent is a huge determinant of your ability to pay for other things in life.

ROB: One thing I've noticed in writing about millennial personal finance issues over the years is that older generations, boomers in particular, tend to criticize millennials for their spending habits. They're frivolous, they spend too much on bars too much on restaurants. From what I see, they basically have different spending patterns, not worse spending habits.

ROMA: The consistent thing that we're seeing is they're spending money on all of the same things everyone else always did. They're not throwing money away. They're trying to have a lifestyle that they want to live. And as they age and get a little bit older, they're also trying to incorporate savings into that. The problem is it's harder than it was before.

ROB: Right. We've got the gig economy. So some people are working jobs that aren't continuous, they'll have periods of unemployment. We have stagnant wage growth, we have high rents and high housing costs. It's harder to afford the downtown lifestyle than it ever was before.

ROMA: And as you progress through the ages, you start thinking more and more about things like, Do I maybe want a home? Do I want to have kids? What kind of life do I want to live?

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ROB: In every episode of Stress Test, we talk to real people and experts to see how the basic rules of personal finance have been stress tested by COVID-19. Today we're talking about what it costs to live a downtown lifestyle. That's up next.

COMMERCIAL:This podcast is brought to you by CPP Investments. Take comfort knowing the Canada Pension Plan Fund will be there for you. We invest to help ensure the CPP Fund remains resilient over the long-term, sustainable and secure for millions of Canadians. Learn more at CPPInvestments.com.

ROMA: We wanted to hear directly from people in their 30s. What does it cost to live a downtown lifestyle? We got a group of friends too. On a Zoom call back in April, one month into the pandemic. Meet Monica, Alex and Jake.

JAKE: Hi, my name is Jake. I’m 33 years old. I’m a B2B SEO content manager at a big publishing company.

MONICA: Hi, my name is Monica. I'm 33 years old and I'm a freelance public relations professional.

ALEX: Hi, my name is Alex. I'm 32 years old, and I run a small cannabis company.

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ROMA: Alex and Jake met about 10 years ago when the economy was in a downturn. They were recent university grads who couldn't find work at home. So they went to South Korea to teach English and they still love being world travelers. When Alex came back to Canada, he met Monica and now –

MONICA: Alex and I are married.

ROMA: They're all very close, which means they can talk together about money.

MONICA: We talk a lot about the struggles that we have with money in Toronto. I mean, you know, now that we're in our 30s. We all have pretty good jobs, pre-COVID. And we've felt like we finally kind of dug ourselves out of that 20 -something financial hole. We still look around and realize that most of us can't, I guess, obtain the lifestyle that we thought we'd have by now.

JAKE: We all work really hard. We're in pretty decent-paying jobs now, because we've been working for more than 10 years for a house to be some magical, you know, future prospect that maybe one day we'll be able to afford, it's a bit of a harsh reality for us, you know, in our 30s already.

ROMA: For Monica and Alex, their household income pre COVID was great.

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MONICA: It can fluctuate a bit, but combined, we make just over $ 200,000.

ROMA: Jake also makes great income that takes freelance work on the side to push it up even further.

JAKE: Like I feel like you need a household income of 100,000 minimum in Toronto just to have an okay quality of life right now. And so that's why the freelance is needed.

ROMA: What's the cost of renting downtown Jake?

JAKE: The total cost of this apartment is 2100.

ROMA: What about you, Monica and Alex.

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MONICA:Our rent is $2850.

ROMA: At least they can share the cost of rent.

MONICA: Also, Alex and I moved in together when we were only dating for six months because of the financial benefit, not because it was the right thing to do in our relationship.

ROMA: Jake also lives with his girlfriend.

JAKE: We'd only dated for like two weeks at that point, but it was just because the places to stay, like moving to Toronto, the price of that is ridiculous.

ROMA: Besides rent, these three friends love to travel the world. COVID has put that on pause for now. But otherwise, it's always been a priority.

MONICA: Alex and I actually quit our jobs and went traveling for nine months. And every year we'll take at least one or two trips together.

ROMA: Jake travels too.

JAKE: So I’ve done all Europe, did Turkey, finally for the first time last year, just a lot of different places.

ROMA: All that travel is expensive, so they scrimp in other ways. This is Jake.

JAKE: So I don’t own a car. I just bike everywhere as much as I can.

ROMA:And Alex.

ALEX: Rather than taking a Uber or taxi or even TTC, I would just walk all the time like an hour, each way to work type of thing just because any way to save money helps.

ROMA: Saving money by not having a car is a benefit of living downtown. Another benefit? The selection of restaurants, which can be hard to explain that to older generations.

MONICA: My mother-in-law actually asked us like, You guys seem to eat out a lot like, how do you save any money? And I know we’re sitting here being like, oh, complain, complain, complain about living in Toronto, but we eat out all the time. We definitely find other ways to save like we’re not just out there spending our money and then complaining that we don’t have enough money. We find other ways to save to make up for going out for dinner. And we are frugal in other ways. And I just think that that’s important to say because I don’t want to sound like a hypocrite sitting here being like, we don’t make enough money. You know, the usual boomer thing is saying that millennials are out there eating too much avocado toast and that’s why they can’t afford the house.

ROMA: It's about priorities and values.

JAKE: The same as my friends who are still back in New Brunswick. They don't go out to eat at restaurants every day, but they have two four-wheelers and a Skidoo and two cars and what do you spend your money on? And where do you save?

ALEX: Just to jump in there as well. You know, we travel a lot but I spent a lot of time researching credit cards with signup bonuses and hours and hours were dumped into researching this so that we get free flights around and so when we actually traveled for nine months, I think we only paid for one flight

ROMA:

Monica, Alex and Jake agreed to give us a peek at their credit card statements to see how they spend. First up, it's Monica. She let us look at her statement for last November when restaurants were in full swing.

MONICA: Well, just looking at a glance it’s all restaurants. $42 at The Federal, $47 at Cumbrae’s, $30 to get my eyebrows done - seems like such a luxury now. $17 at Ricardas. $15 at Sansotei Ramen. It’s all food. A couple of Ubers, here and there. $56 at Marché Istanbul, I went there with Alex and Jake. $21 at the Seafront Fish Market. I’m kind of embarrassed.

ROMA: There was one concert ticket in there and a flannel jacket too. But overwhelmingly, all her expenses were restaurants. Monica knew that would be the case.

MONICA: I have way more regret when I buy, like, a dress for $100 than if I went out for dinner for $100. No question, going out for dinner for $100, no big deal. So that’s probably why there aren’t that much of those types of purchases on my card.

ROMA: Alex and Monica are married but he has a separate credit card which they usually put their groceries on. He looked at his December statement.

ALEX: From the top, the first one is Virgin Mobile. That's our internet for $67.80 cents. Shoppers Drug Mart for $4.49 cents.

ROMA: There were lots of small charges, $7 here $9 there, Tim Hortons, the corner grocery store, a $29 ticket to the symphony. The most notable thing was that for a December credit card statement, it didn't seem like there were any presents.

MONICA: We don't do gifts really. We do things together instead. You know, every time we think about purchasing things, we think about how much further it can get us on a trip because our main focus has usually been eating out or traveling.

ROMA: And how does it feel for Monica and Alex to read their credit card statements out loud?

ALEX: It makes me realize that I am in fact a cheapskate. Yeah, that's all I got.

MONICA: I'm actually shocked that I spent $3500 in November, mostly on food. I've never really analyzed or looked at it that way.

ROMA: Now it's Jake's turn. He read his November statement.

JAKE: This one is pretty surprising actually, I don’t think I’ve ever looked at November which, I was spending a lot because Christmas was coming up. But for example, I have $352 for an Air Canada ticket. And I actually have two of those, Air Canada, $352, Air Canada, $352. Bar Poet, $100. Netflix, $17. YMCA, $66 Subway Sandwiches, $12. I seem to eat out for lunch a lot, if I look at these, which is something I clearly need to stop doing. Amazon, $310. To be honest, I can’t remember what I bought, which is pretty funny because it’s quite a bit of money for me not to remember what I spent that on, on Amazon. Google Play, which is what I use to watch movies, I’ve got five of those for $6.99 each.

ROMA: What's the total damage for that month?

JAKE: It was $1900.

ROMA: We didn’t ask them to read their credit card statements for a “gotcha” moment or anything like that. We just had a genuine curiosity about the way they spent. And the experience of reading their statements out loud, definitely made all three of these friends really think about what it costs to live their lifestyle.

MONICA: Just that exercise and taking a look at our credit card statements, it made me think, man, we need to stop eating out so much. You know, then the question is, does it mean we have to stop living our lives in order to get a house? Like do we really want to sacrifice great experiences for a material thing?

It’s just kind of challenge because obviously when we talk to, for example, people in our parents’ generation, most of them bought their houses in their 20s for like $80,000. And, you know, so their perspective and their advice on what we should be doing to be able to attain the same things that they could have. It doesn’t really apply to us.

JAKE: I think for me more than ever, it's just in the back of my head that the cost of living here isn't worth it in the end?

ROB: Jake, that's a question that everybody living in a big city has to be asking themselves if they find that tons of money is being sucked up by their rent, or the cost of buying a house is going to be prohibitively expensive. Eventually you have to ask yourself, Is it all worth it? Probably when you're young, it might well be. As you get older, you're gonna have to start to make some decisions.

ROMA: One thing that I think is really worthwhile is sitting down like this and having a long hard look at your credit card bill. You might be surprised by what you find.

ROB: One thing I'll say I've noticed over the years is that when it comes time to have children, that's when the big decision happens. Where are we going to live? Or what are we going to do next?

ROMA: Absolutely. Kids are a game changer. Once the baby's there, you're likely spend less time at restaurants and bars, you're going to have to get a will, you'll have to start looking at how you'll pay for things like daycare. So all of these things will shift the kind of lifestyle you're living.

ROB: Why is it so difficult for today's young adults to afford the downtown lifestyle? How did we get here?

When I look at the struggles millennials are having, to afford the downtown lifestyle today, I think back to when I was in my mid 20s back in the late 1980s, early 1990s and how easy it was for me to juggle everything. I had a junior journalist job at the Canadian Press I was making a good amount of money, nothing extravagant. My rent was extremely cheap. It was in the low $400s, including my parking spot. I had money for going out to eat. I had money for travel. No, I was not a very avid saver but I came to that a little bit later on. I did not carry any debt beside my car payment and I felt on top of the world financially, I did not feel I was struggling at all.

ROMA: A lot’s changed since the late 1980s. Millennials are entering adulthood at a very different time. Tuition has gone way up, job markets got a lot tougher. There’s a lot more temporary jobs, a lot more gig work out there. work without work benefits and pensions. We have stagnant wages. And the big, big thing is the rising cost of housing. So rent is shot up. If you want to buy a home that’s become more unaffordable. All these things have combined to create a perfect storm where people that are coming to live in these big cities are just finding it hard to make it work. One thing COVID has done is expose how vulnerable people that are living really close to the edge are.

ROB: I've seen a lot of surveys showing how various generations have been affected financially in the pandemic. And there's no question that millennials and Gen Z have been hit by far the hardest. They've taken the worst hits to their income, and they have the most anxiety about how they're going to get by in the future

ROMA: Money worry is huge, and never more so than at this time. Unfortunately, there's no easy answer here.

ROB: I think we need to strive for some balance of sustainability in our lives. The downtown lifestyle is awesome. I enjoyed the heck out of it in my 20s. And I encourage everyone to try it. But eventually, you need to sort of have a reality check and decide, where am I going? And how do I keep things in balance in terms of saving and spending?

ROMA: One of the things we see with millennials is a sense of hopelessness. They're never going to get that perfect job with a pension and benefits. They're never going to be able to have some of these things that came more easily to older generations. And so there's a feeling of, I can't get ahead of this. Why should I bother trying? That's dangerous because you can make small changes and that's something we're going to look at next.

ROB:

I'm really looking forward to this next interview. It's with an expert who owns the downtown lifestyle and understands the importance of managing your money. That's up next.

COMMERCIAL: This podcast is brought to you by CPP Investments. At CPP Investments, we never lose sight of the long term. We invest the Canada Pension Plan Fund to help provide financial security for generations of Canadians. We diversify the CPP Fund across geographies and asset classes to access the best investment opportunities and generate sustainable long-term returns. The fund is now more than $400 billion. To learn more about our investment performance for Canadians visit CPPInvestments.com.

ROB: Today I'm talking to Bridget Casey, who started the personal finance blog, Money After Graduation. It's based in Calgary.

We heard from our millennial group in Toronto, Monica, Alex and Jake, that they prioritize experiences above all else. Is this typical of what you see in this group? And if so, how does it play out in their spending?

BRIDGET: I think it's very typical. Actually, reviewing their spending it looked like a lot like my own, it looked like that most of my friends and I think how most millennials are spending their money are especially on restaurants, dining out with friends, and if they can afford it, also travel and concerts and entertainment like that. So very textbook spending, for millennials, at least.

ROB: What's a typical week look like for you, spending-wise, on lifestyle costs?

BRIDGET: Pre- or post-COVID?

ROB: Let's do both. So pre-, let's start off with pre-, what was life like prior to February 2020?

BRIDGET: Prior to February 2020, I did most restaurant and coffee spending, I know I would go to my local coffee shop, I'd probably spend seven or $8 a day there. I would often meet friends for lunch, maybe twice a week. I would either order in or I would go out to dinner, once or twice a week as well. Every so often there would be like, just meet someone for a few cocktails. We'd go to shows somewhere, like really cheap $25 concert tickets. Other times I'd spend up to $200 or $300 to see an artist who was in town. Yeah, my favorite Sundays were the ones where you get a coffee and then just wander Homesense or Chapters Indigo for a few hours and buy whatever catches my eye.

ROB: Is this is typical of you and your peers?

BRIDGET: Oh, I think so there would be at least like two or three people with me at each of those things and doing all the same things as me.

ROB: What about travel?

BRIDGET: I had a lot of trips booked before COVID hit I am because I'm in Alberta. So sometimes I like to get away just to see bigger cities for concerts or I was going to see some comedy artists, so small and large trips in that respect.

ROB: You're a long-time personal finance, blogger and social media presence. Cost it out for us pre-pandemic, the restaurants and the coffee to start with, and then add the trips.

BRIDGET: Restaurants and coffee was probably about $100 a week, maybe a little bit more depending on the places that we went. Trips range in price from about $1,000 to $3,000. I don't think I've ever spent more than $3,000 on a trip. So that would be the ceiling.

ROB: How has the pandemic affected the math of living the urban lifestyle for people like Monica, Alex and Jake?

BRIDGET: I'm sure it took down their dining out and restaurant spending and cocktails, drinks, everything like that quite a bit, any kind of events, all of that shut down, and suddenly you're trapped in this very small space that you're renting. You're told not really to go outside. I was really grateful for the size of my apartment and how much I had invested in decorating in it because I suddenly had to be home all the time. And I think for millennials that are in these urban centers where you kind of lose that nightlife or even the day to day busy-ness of the cities. I think the pandemic really brought to light that maybe the trade-off was quite high to live in an urban center.

ROB: Bridget, I'm trying to understand the psychology of the spending habits of young people. And it strikes me that social media and fear of missing out must play a role in this, the idea that your friends are out doing cool stuff, why are you not doing it? Why not just join right in? Talk to me about that.

BRIDGET: We are marketed to constantly. Like, my friends and I joke all the time, how often we're tricked by Instagram, because we'll be scrolling through an ad will pop up from a local business or somewhere else, we click on it and then it follows you around the web for the next two weeks. So I don't know if it's so much of our friends doing it as it is just expert marketing algorithms. The other thing that I noticed with millennials and I did with myself, especially when I was in my 20s, is there is a little bit of a sense of hopelessness with the long-term financial goals. I mean, when you're looking at the prices of houses across Canada, or the cost that it will be to retire, you think I'm never going to be able to afford this. So I'm just going to treat myself to a $14 martini because, yeah, it's expensive, but at least it's something I can get.

ROB: What do you think about the idea of setting aside a few years to just live it up and then getting serious about money?

BRIDGET: I don't think that's a good idea. I think it sounds tempting, but it's so hard to change your behavior. People always have in their head that they'll be able to flip it like a switch. That's why they're like, oh, as soon as I pay off my debt, I'll start saving, or Yeah, I'll just live on a really strict budget for the short timeframe, and then I can stop. But it's way easier to make small changes to your behavior over time that have big impacts than try to do it all at once because you can't follow through, no one can follow through. This is exactly why everyone's gonna run back to the restaurants when COVID is over. Like, we respond to stressors in our environment so you have to create habits that protect you against things that will throw you majorly off track.

ROB: Now, I'm sure this will not come as news to you but the baby boomer generation, and older Canadians than that, do not understand what's on the mind of younger Canadian at all these day. So the cranky boomer always asks, Why don't you just eat out less? Why don't you just drink at home? Why don't you make your own coffee? What are your thoughts?

BRIDGET: Because then we don't get to do anything!

At this point, young people are so overburdened by student loan debt, wages are stagnated. So they're working super hard just to try to get a foothold in the workforce and in their careers and move up in those with essentially no traction. Now, you're telling them, Oh, in addition to living in a city, you can't really afford and out a job that's working you to the bone, like, please never go out to dinner or ever buy coffee I that's a miserable existence. And I think we just have to forgive young people and let them have some luxuries in their budget so that they can build the momentum and get the traction that they need elsewhere in their finances. I mean, the answer isn't Millennials are spending too much on avocado toast and lattes. The problem is that we're not paying them the $30,000 more for their job that they really deserve if we were going to keep wages with inflation.

ROB: I'd like to hear your views on debt and whether it's inevitable for these low-income young people trying to live in urban lifestyle lived downtown, to enjoy all everything downtown has to offer. Can you do it without accumulating debt somewhere, somehow?

BRIDGET: You can absolutely do it without accumulating debt. If you aren't a student. Student loans are virtually unavoidable unless your parents have paid your tuition for you. And I feel like as long as you attack those aggressively, like I usually tell people, you should be able to pay them off in half the timeline that the government gives you. So most federal and provincial student loans will give you a 10-year repayment timeline. If you pay it off in half that and you can still enjoy your life on the side. I mean, that's perfect. Keep doing that. There's no reason to be going into credit card debt or taking out a line of credit so you can get cocktails with your friends every Friday. So that's a hard no. And the other thing is I would tell people is it is actually much different now that I'm in my 30s than it was in my 20s. Like, I felt very behind. And it was very difficult to get traction and a foothold when I was in my 20s. But as the years go by, like, your income generally does increase, your debts go down. And then you do have a lot more freedom in your budget, at least until you have children. It's important for people to remember like, they always have the sense of urgency that they need to get into the real estate market right now, or they need to do something else right now. And I mean, no one's going to know that you bought your house two years later than you planned. So I think people just need to slow down on pressuring themselves on these milestones so they can better afford them.

ROB: Yeah, I’m glad you brought that up. Because it always strikes me that the benefit of these longer lifespans that we’re living these days isn’t just that you get to live to 92 instead of 90, it’s that you can sort of take longer to do everything. So take a few more years to find your feet in the workforce and to save for a house down payment and buy a house later on because you’re going to be working later. Now you’ve mentioned that the determining factor for student debt is whether you have generous parents who paid for your education. Give me a sense of what you’re seeing in terms of how parents are supporting their adult kids in other ways, helping them with their cell phone bills, rent subsidies. Are you seeing any of that?

BRIDGET: I am, for more affluent families. It really depends on the socioeconomic class of your family and what they can afford to give you. Generally, the wealthier the parents are, the more they will pay for, for their children. But middle-class and like lower-income families are really struggling to afford anything for their children, and often the parents will help to their own detriment. So parents that are giving their kids $400 or $500 a month to help them with rent. I mean, sometimes that's compromising their own retirement security. And I think that's a very dangerous position to be in. I mean, over the past 10 years that I've been writing about personal finance, I've changed my perspective before I used to be like cut the cord, don't help your kids like, let them sink or swim. But now I recognize the costs are just so ridiculously high that if you can afford to help your children out, like give them that financial advantage because they need it, especially to survive in these cities. Just please don't do it if it's going to compromise your own financial security.

ROB: My take, as a parent of a 23 year old, 26 year old, and I have lots of friends and family with kids in similar ages, is that it's happening a fair bit. It's kept fairly quiet. But I think this kind of financial support is flowing down to varying extents. And the feeling is my kids need some help. The economy isn't very welcoming for them, and they're not where they should be. And if I have the means I will help out.

BRIDGET: Exactly.

ROB: What about retirement? When I was in my 20s, and I started working, I was not saving for retirement. It wasn't on my mind. I wasn't interested. My dad kicked my butt. So I finally got around to it. What about today's young people are they thinking about the need to save for retirement? So many are in gig jobs. They don't have pensions, it's super important they do it. Is it on their radar?

BRIDGET: They know that it's something that they should be doing. But they almost never know how to get started. Like in that context, I think it's actually a lack of understanding of how easy it is to save for retirement. Because when I tell people, oh, you can just open an account with a robo-advisor and put $50 a month in and they were like, What? That's it? And oh, of course, I can do that. Because I think a lot of young people in their mind, they're like, Oh, my God, I need to save $900 a month for retirement, I can't afford that. This is something I'll think about three months from now. And they keep putting it off and off instead of building the habit with a really little amount. So if we can find ways to communicate that, just start with whatever you have and get going, that's the most important aspect because they don't realize how easy it is.

ROB: Is that a failure of the young people or is that a failure of the investment industry, to talk to these people and say, We have a solution that works for you at your level.

BRIDGET: I mean, I don’t know where all the systemic failures are. They’re everywhere. Part of it is there are parents who just lucked out on huge financial gains in real estate and they had pensions, so they didn’t need to save for retirement on their own. They’re not necessarily aware of how good the new fintech tools that have come to the market. I think many of the financial brands are doing a great job marketing, but the traditional investment industries that have mainly come from the big banks, they’re of course not promoting these savvy little robo-advisors. They’re not telling young people ‚Oh, you have more options than ever. Look how easy it is. They’re still saying like, Please go in our banks mutual fund. So I think the way that we’ve used banking has changed, and it’s changed the access to information. So millennials aren’t necessarily getting those suggestions from an investment advisor that maybe their parents were 30 years ago, because they’re not seeing their investment advisor. They need like commercials on YouTube, and some ads on Instagram to get them saving for retirement. That’s the secret.

ROB: Bridget, at what age should you be on track in your finances? Say you've got an emergency fund, you've got retirement savings, you either have a house down payment, or you're on track to get one. What is that cutoff age?

BRIDGET: 35?

I know a lot of people think that it's 25 or they think they should have everything figured out by 30. I don't think that's reasonable at current cost of living prices. I think if you have most things under control by 35, you're doing really well compared to your peers.

ROB: How do you think that compares to previous generations?

BRIDGET: Oh, previous generations. They were set by 22. They had everything they needed. They had a house, they had a job. They had a pension, all by 22, 23. Late starts at 25.

ROB: Explain to a skeptical boomer, exactly how it's different for your generation.

BRIDGET: I think what boomers don't realize is how much the costs have gone up. Many boomers will be like, Oh, well, I started at $32,000 a year in 1982. And it's like yeah, that person will still start at $32,000 a year now, except their rent is $3,000 a month and they have $50,000 of student loans and like they're only going to make it because they have to live with four other roommates, and live on ramen for the rest of their lives. And then the other thing is, they always talk about, Oh, interest rates were double digits for me when I bought my house and I'm like, Yeah, but your house was $40,000. You also had double digit interest rates on your savings accounts and your GIC's. Now, millennials, the only way they can enjoy any financial security is in the stock market. It is more accessible than ever, but many people are rightfully intimidated by it and like now I have to take on risk to get a 5, 6, 7, 8, 10% return. If I could have gotten that on a GIC, like no-risk 10%I just I can't even process how nice that must have been. And now they have to take on huge financial risk in order to get any kind of safe return that was just handed to boomers. They start to get ahead and they make it in their late 20s, things are okay, then they have a baby and daycare is $2,000 a month. Like, it's just wild how many hurdles young people have to overcome to just get the baseline that their parents had right out of the gate. And it's so frustrating to tell this to older generations, because they just clap back that we're lazy and entitled, and I think like not wanting my post-secondary education to cost $10,000 a year, it doesn't make me lazy or entitled, or for me to spend less than $25,000 a year on daycare, like, really? Like it's just, it drives me nuts. And then they put all these pressures on young people that they're failures for not hitting the milestones of adulthood that are so important like homeownership, marriage, children, and those are all really expensive things that we're priced out of. We're running the race with weights around our ankles and just like, cut us some slack, please.

ROB: You mentioned earlier a sense of hopelessness. A feeling that why should I bother trying to be careful with money when I'm getting swamped. Anyway, offer us some words of hope to let millennials know it's worth trying, you will get better.

BRIDGET: First, I just want to acknowledge that it just feels that way. And that's the normal feeling. It's not actually as dismal as you think. If you stick to the things that you're supposed to be doing, and I really mean like the simplest things like committing to an emergency fund. I usually tell people to start your emergency fund, just transfer $25 a week into savings account. That's all you need. That'll save you over $1,000 in a year. When you're two years in, you do have thousands of dollars saved, you've moved ahead in your career, you found other ways to optimize your spending. So it does get better but you have to commit to the journey.

ROB: Okay, thanks, Bridget.

BRIDGET: Yeah, of course. Nice talking to you. As always.

ROB: I usually give three takeaways at the end of every episode, but in this case, I think one sums it up nicely. if you will. Want to live downtown you will have to find a way to save. It will be hard, but it must be done. You will have to save for retirement for future trips and vacations and for emergencies. The pandemic really highlighted that. Roma, what are your thoughts?

ROMA: I thought Bridget was a great guest. It's important to understand everyone is in charge of living their own life. There's no judgment applied here. You just have to make some decisions that allow you to do that and not be financially stressed. At the end of the day, it's up to you.

Thank you for listening to stress test. This show was produced by Hannah Sung. Editing and mixing by TK Matunda. Our executive producer is Kiran Rana. Thank you to Monica, Alex and Jake in Toronto, and to Bridget Casey of Money After Graduation based in Calgary.

ROB: If you like what you heard, let the world know. Leave us a rating and review at Apple Podcasts. And if you know someone who wants to live the downtown lifestyle and get their house in order, send them this show. Tell them to subscribe to Stress Test at Apple Podcasts, Google Play, Spotify or their favorite a podcast app.

ROMA:And if you have a question for us on the topic of how much it costs to have kids, that's our next episode. Open your voice memo app on your phone, record your question and email the file to me, Roma Luciw. Rluciw@globeandmail.com.

ROB:You can find us at the globeandmail.com where we cover all things financial. Thanks for listening.

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