Recent high-school graduates are exceptionally optimistic about their financial futures, with most expecting they will have an annual salary of $70,000 within 10 years and will have purchased their own home, according to a survey released today.
The B.C. Securities Commission conducted the survey of 3,000 young adults to assess the effectiveness of secondary-school financial-education programs.
The commission suggests the students' expectations are unrealistic, noting that the median income of 25-to 29-year-olds is $29,000 for those with a postsecondary degree and $26,000 for those who have only a high school diploma.
MacNeill secondary school teacher Kevin Henders agrees. Henders teaches Planning 10 - a required course with a financial literacy component - in Richmond. He said his students are often naive about finances when they enter his class, and that his role is to help them face reality.
Henders teaches students about the salaries for jobs they are interested in, and makes that information more real by talking about expenses, such as how much it costs to buy a house in the Lower Mainland, or how much university will cost.
"I will be very blunt with my students," Henders said in an interview. "The assumption is that they will do really well in school, and that will lead them to that $70,000-a-year job, but I tell them the reality is that it's really competitive out there and you're not going to be making that starting out."
Students in B.C. posted the highest scores in the country on a basic financial literacy test included in the survey, with 42 per cent scoring an A, compared to 35 per cent across the country.
Katharine So, a Grade 12 student at Churchill secondary school in Vancouver, said she's going into acting or directing, so she could either be a starving artist or make a healthy salary.
"I directed a play and I lost money, but I was in a movie and I was paid $100 an hour," So said. "So it could go either way."
Adrianna Trowsdale, a Grade 12 student at MacNeill secondary who wants to become a social worker, said she remembers learning about finances in math, planning and in the graduation transitions program.
"I think it was very useful because it got me prepared for the future," Trowsdale said, adding that she thinks she will earn about $70,000 each year, and that she will be able to own her own home within about 10 years.
Almost three-quarters of respondents said they expect to own a home within 10 years, even though Statistics Canada estimates that only 42 per cent of 25-to 29-year-olds nationally are now homeowners, the report said.
Cory Song, a Grade 12 Churchill student who wants to be a lawyer, said he would be in his mid-30s before he could afford to buy a home, while Kenneth Moy, a Grade 12 MacNeill secondary student who plans to become a dentist, said he thinks he will be a homeowner by the time he's 30.
Daniel Wang, who plans to go to the U.S. for business school - with help from his parents - to become a businessman or a financial planner after he graduates from MacNeill, says he should be able to own a home by the time he's 30 or 35, earning $80,000 or $90,000 a year.
The survey also found that eight of 10 recent graduates expect they will be financially better off than their parents.
Darren Du, also in Grade 12 at Churchill, said he will be hard pressed to be more successful than his father.
"My dad is way more hardworking than me and he's very devoted to his job," Du said.
The National Report Card on Youth Financial Literacy was released to mark the start of Financial Literacy Month in November.
