Father’s Day – What has changed financially between generations?

2022-06-09   minute read

Randy Kobbert

Lifestyle Debt

Debt Solutions

Between generations and over the years, our behaviours, attitudes and approach to finances have changed dramatically.

Let’s take a moment to roll back through this past century and take a look at some of the changes in how your great grandfather, grandfather, father, and you may have accessed and managed their financial services.

adult father and son discuss accounting and financial scenarios

Saving, spending habits and credit habits:

The Silent Generation

Chances are good that your great grandfather was the sole income earner supporting the household. This traditionalist approach from the silent generation likely contributed to less consumption and a greater tendency to save for larger expenditures. Few used credit as a tool for reaching those purchasing milestones. As a result, this generation’s debt-to-income ratio was significantly lower than we see across the younger generations.

This group was also typically very loyal to their local financial institutions. And, due in part to lower savings and fewer credit product offerings, they were less inclined to spread their financial affairs amongst multiple institutions.

It was very likely the home was the primary focus of their wealth.

Baby Boomers

In the post-WWII era (after 1945), the baby boomer generation continued to reap the benefits of low interest rates and rising home prices. They also had improved access to employer-sponsored pension plans, boosting their savings and allowing for greater consumption — particularly as they reached their retirement years. Along with increases in their home values, this has helped offset their historically low retirement savings rates.

Boomers have been most likely to embrace in-person advice from their local financial advisors, as access to enhanced technology was introduced much later in their lifetimes. The desire for home ownership was very common and accessible. 

In the past 100 years, this generation is responsible for the largest accumulation of wealth of all classes, due largely to rising real estate and investment values. This accumulated worth will in turn become responsible for a record transfer of wealth to more recent generations, which will largely influence multi-generational financial decisions in the years ahead.

Generation X

The generation commonly referred to as Gen X (born between 1965 and 1980) has been spending a larger proportion of their income on housing than prior generations. Nevertheless, due to rising incomes, along with continued access to employer pension plans and asset growth, they are arguably the best savers in the past century.

While Gen X is generally more comfortable using digital services than older generations, they still align with Baby Boomers in their preference for more traditional financial institutions or banks. In fact, Gen X trusts their primary financial services provider more than any other generation with a recent report showing a 91 percent trust metric.

This generation has also been the first beneficiary of the aforementioned wealth transfer, significantly influencing their consumption patterns and credit use. Nevertheless, studies suggest that Gen Xers express much more concern over their financial affairs than prior generations. This has already been demonstrated to affect policy considerations for lawmakers as they try to assist this and the following generations with their economic challenges.


If you are a millennial (or Gen Y), you were born between 1981 and 1997. You are now the largest generation and may feel like you’ve been given an undeserved reputation for higher spending habits than prior generations, such as dining out, apparel / personal care, and inflated transportation costs. Millennials have the greatest post-secondary education of all generations to date, but also the highest average student loan debt to match. Due to changes in the job markets, they are also more likely to be in contract work and gig employment arrangements with reduced benefits and a lack of pension plans.

Given the current employment market for millennials, it is even more crucial to focus on saving and investing for the future. Reports and studies suggest millennials are ready to overtake the Gen Xers as the best overall savers. This group has embraced the digital era. Rapid advances in technology have introduced this and prior segments to new financial products and speed of delivery. This generation is also being exposed to different social and societal wealth expectations through social media channels and other avenues. This has perhaps led to a perceived need for instant gratification, and pressure to “keep up with the Jones.” 

With credit more accessible than ever before, millennials are quickly overtaking prior generations for their perceived influence over spending behaviours. As such, are now primarily targeted by financial services firms offering both investing and credit services.

Gen Z

The most recent generation is known as Gen Z or the zoomers. They are on pace to have the most education and the highest annual incomes — and to be the biggest spenders within the next decade. Further to their spending habits, studies have suggested they are more likely to spend on acquiring things such as clothing and electronics, as opposed to experiences sought by their earlier counterparts.

Gen Z are the trendsetters who will dramatically shape consumer trends and in turn, the way financial services are provided to us in future. Since they have the most extensive choices for financial products to date, they are less inclined to be loyal to the big banks and financial institutions, and more open to utilizing virtual financial services. Unquestionably, much of our digital financial system today is tied to credit scores and other metrics. Zoomers tend to be more focused on fees and value received from their financial services, as are millennials before them.

While Gen Z continues to enjoy the easiest access to credit of all prior generations, they also are more aware than any generation before them of the importance of building and maintaining healthy credit.

Recent studies have also suggested this grouping has already begun to evaluate their financial goals and plans more than any prior demographic. In doing so, they rely much more heavily on social media than past generations. Finally, this group will be most influenced by government economic policy decisions going forward, as lawmakers look for ways to stimulate economic growth.

Key takeaways

Much has been said lately about the rising cost of home ownership in Canada, and the prospects of rising inflation and interest rates following the pandemic. Even with this era seemingly ending, the unprecedented consumer debt levels (and related financial problems) that emerged from historically low interest rates will likely continue for many years to come.

There is no question that previous generations with accumulated real estate and investable assets have enjoyed strong overall growth to this point. The future looks less certain for those on the way up.

The old financial rules passed along between the generations don’t necessarily apply today. Instead, the younger generations are questioning the traditional measures of success and defining new markers — charting a course that looks quite different from the ideals of previous generations. The inter-generational wealth transfer already underway will continue to play a significant role with future generations and drive their spending, savings and use of credit.

Regardless of your, your father’s or your grandfather’s financial circumstances on Father’s Day this year, your financial fundamentals should be the same:

  1. Take a snapshot of your current debt and assets.
  2. Identify both your financial and non-financial “SMART” goals (specific, measurable, achievable, relevant, time-bound).
  3. Develop a plan to achieve those goals, starting with a realistic budget.
  4. Monitor and amend your plan consistent with your results.

While there may be many differences between generations on how we view our finances, this approach will serve to set you up for long-term financial success, regardless of how you define it!

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