A new financial landscape means younger Canadians need to rewrite some of the old rules around money.

“Back in the day, the goal was the house with the white picket fence … and that was the sort of definition of success,” said Brenda Hiscock, certified financial planner at Objective Financial Partners Inc. “We’re in a different world now.”

From factors ranging from the skyrocketing price of real estate to relatively more expensive costs of education and raising a family, and with a radically different employment landscape, many millennials and generation Z Canadians find themselves unable or unwilling to follow their parents’ financial advice.

Homeownership over renting

Hiscock has helped clients figure out their own financial goals — and not just aim for the same milestones their parents did.

For example, she has worked with clients who were considering homeownership because of their parents, but not necessarily because of what is best for them.

Ainsley Mackie, portfolio manager at Verecan Capital Management, said that people shouldn’t hold themselves to the same standards as their parents, pointing to the skyrocketing cost of housing making it much more difficult to achieve or maintain homeownership today.

In many cases, renting can be the more financially viable option. That move can free up funds for long-term investing, which can leverage young people’s long timeline to compound returns. It also might be more prudent for someone who moves around a lot or wants the freedom to travel.

Young adults are reaching key life milestones, such as having a full-time job, being financially independent, living on their own, getting married and having children, later in life than their predecessors, research, including a Pew Research Center study released in 2023, indicates.

“To me, financial freedom is the ability to live the life that you want to live in the manner that you want to live it,” Hiscock said. “I think that many people are starting to look at it that way, but they’re coming in with so many biases.”

People often aren’t aware that they are carrying their parents’ financial beliefs and habits forward into their own lives, Hiscock said.

She has seen clients not begin to question the way they view and spend money until their late 30s to 40s. Sometimes, this change is triggered by the death of a loved one, or by their children getting older, especially if they realize they are not living life the way they want to.

All debt is bad

A common issue with her millennial clients is being raised with the mindset that all debt is bad, Mackie said. She has seen them become hyper-focused and anxious about paying off their mortgages, and push savings to the backburner.

“Having a low-rate mortgage and investing excess savings in a (registered retirement savings plan) and (tax-free savings account) can be a way of building personal savings and meeting financial goals sooner,” she said.

Parents from an older generation may recommend the use of cash and debit cards over credit to avoid debt, Hiscock said. “There is some relevance to this since you could avoid overspending, debt, and interest charges,” she acknowledged. “But if you use credit responsibly and pay it off monthly you are building a credit score for future needs, such as a mortgage, often accumulating points, for travel cards for example, and it provides convenience.”

Stick with one job

Parents who are more risk-averse might advise children to stick with one employer for the rest of their life instead of considering other options that could come with a higher pay or a better position.

Millennial money expert and accredited financial counsellor Jessica Moorhouse said it wasn’t easy forging her own path when it came to money or her career.

“I was really only able to start doing that in my 30s, when I had a little bit more sense of myself,” Moorhouse acknowledged. “In your 20s, you’re kind of using your parents’ guidebook for how to be an adult.”

The world of work has drastically changed over the past decades, with the rise of flexible working arrangements and jobs that never existed previously, and the decline of pension plans in the private sector. Moorhouse recounted how her mother worked for a school board in British Columbia for her entire career, while her father stayed with a news outlet for about 30 years until he got laid off.

“Their perspective was, ‘Find a job and stay with them and be loyal, and there are lots of benefits to doing that,’” she said. “That was never my life experience, though.”

Eight years ago, Moorhouse made the difficult decision to quit her stable job at a law firm to start her own financial education company.

“A lot of my fear of taking risk was (my parents’) financial trauma that when you take risks, something bad can happen,” she said. “If I’d actually taken the same route (as my parents), I probably would be worse off financially.”

Parents’ unhealthy financial habits

Part of the problem, Moorhouse writes in her recent book, Everything But Money: The Hidden Barriers Between You and Financial Freedom, can stem from the way your parents talk to you about money in your formative years.

A 2022 survey conducted by Leger on behalf of Royal Bank of Canada’s youth money management app Mydoh indicated that more than half of Canadian parents feel like their own parents were not proactive enough in teaching them about money and budgeting. As a result, many of them felt their relationship with money was affected by their parents’ relationship with money.

Another 46 per cent of respondents felt they needed to unlearn unhealthy financial habits, such as not having a budget, not saving a set amount each month or going into debt.

“Inherited financial beliefs and traumas can impact one’s relationship with money, leading to poor financial choices, stress or limiting beliefs,” Mackie said. “Recognizing them is an important first step in breaking the cycle and developing healthier, more empowering relationship with finances.”

Moorhouse said that if she had taken the same path as her parents and stuck to their instincts, she would not be in the position she is today, making about five times as much money as a self-employed individual than she was earning at the law firm.

“You really have to identify where (your fears are) coming from. Your parents, and maybe (you) need to let them go, because that’s their story, not (yours).”

• Email: slouis@postmedia.com

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