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New Grads Have Great Expectations Nearly two-thirds of students optimistic about future plans despite economic downturn

TORONTO, September 4, 2008 – A slowdown in the economy has not dampened the spirits of students who have recently graduated or are set to graduate from a Canadian university or college in the next 12 to 24 months, according to a national survey from BMO Bank of Montreal.

The results of the survey, conducted by Harris/Decima, indicate:

Nearly two-thirds of students, 62 per cent, say current economic conditions will have either a positive impact or no impact on their post-graduation plans;
Seventy-four per cent believe they/their family will be better off or the same financially in one year's time.

“It's encouraging to see the optimistic outlook of Canadian post-secondary graduates,” said Sid Chopra, Vice President, BMO Bank of Montreal. “The survey results show that students feel positive about their future regardless of the economic climate. They are confident there will be a high demand for qualified graduates – particularly in the education and technology sectors.”

Looking Ahead: Financial Priorities

The majority of respondents recognize the importance of reducing their debt and planning for the future.

According to the survey:

Seven in ten, 71 per cent, say a financial priority is to pay off their student loans;
Six in ten, 62 per cent, indicate that saving for a down payment for a house or condo is a financial priority;
More than half of respondents, 58 per cent, anticipate being ready to buy their first home in three to eight years.

“Given the average age of a first-time homeowner in Canada is 33 and the average post-secondary graduate is 22 years old, buying a home three to eight years after graduating is an ambitious goal, but certainly attainable,” said Chopra. “To make it a reality, students need to be diligent about managing their finances, and they need to start saving early.”

Although optimistic about their financial future, 43 per cent of this generation of graduates believe they will not be ready to retire until they are at least 65 years old.

“Increasingly Canadians are staying in the workforce beyond the age of 65, but there is an opportunity for those starting their careers to decrease that time horizon, if they start working at it now,” adds Chopra. “BMO has financial advisors who can help map out a financial plan to help students reach their short and long-term goals.”

Managing Finances

Along with a positive outlook, post-secondary students are confident about managing their finances, although many believe the variety of savings and investment options is overwhelming and should be more straightforward.

According to the survey:

Ninety-one per cent of respondents consider themselves average or above average when it comes to money management skills;
About two-thirds of respondents, 64 per cent, say that choosing what to save and invest in should be easier;
Six in ten, 61 per cent, say that the variety of savings and investment choices are intimidating.

Along with providing planning advice for post-secondary students, BMO Bank of Montreal offers special financial programs for current students including, free student banking, a student line of credit and the BMO SPC Mosaik MasterCard. BMO is the only bank that offers graduates one year of free banking after graduation.

The Harris/Decima online poll was conducted from July 31 to August 7, 2008 and is based on a sample of 1,005 post secondary students and recent grads, coast-to-coast.

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