Launching into adult life and gaining financial independence feels hard right now: with a changing work landscape, price inflation, and expensive house prices, financial anxiety among Generation Z is high. And it’s not just the youth who are worried – it’s their parents too.
Gen Zs – Canadians aged 14 to 29 – are feeling the pressure. Incomes in this cohort have not kept pace with inflation in recent years, making the cost of living one of the biggest barriers to achieving financial goals.
A 2025 BMO survey of about 2,500 adults showed 88 per cent of respondents believe parents need to be worried about their children’s financial futures. In the same survey, 82 per cent said parents need to continue supporting their children into adulthood, and nearly a third said that support should last as long as the parent lives.
My experience with clients reflects these sentiments. When putting together a financial plan, many people want to incorporate supporting their adult kids. This can be with giving a lump sum of money for a big expense like a down payment on a house or condo, by helping to pay for day-to-day expenses, or by paying for weddings and family vacations.
Looking at all of this can feel like a bit of a downer, like our Gen Z children are doomed. But I don’t think this is true. While there are many factors pushing and pulling on the outlook, on balance our Gen Zs will probably do okay.
Looking at some hard numbers can give us clarity. What would life look like for a single person living in Toronto after finishing college or university?
Gen Z’s retirement savings problem could become an employer’s problem
According to a 2024 Council of Ontario University’s survey based on responses from about 30,500 graduates, the average annual salary two years after graduation is about $64,000. After tax, and CPP and EI contributions, take-home pay is $50,400 or $4,200 a month.
The average rent for a one-bedroom apartment in Toronto is $2,300. Groceries could run around $400 a month, while cellphone and Internet and other household needs amount to about $290. Public transit and personal care round out the necessities. After all these expenses, a person can expect to have about $1,100 a month left.
Of course, life wouldn’t be much fun without the extras so let’s include eating out, a gym membership, entertainment, and clothing, adding $610 a month. In total, a Gen Z can be left with about $500 a month or $6,000 a year.
Having a roommate provides a lot more wiggle room in cash flow: sharing a two-bedroom apartment can cut costs by about $850 a month, allowing for about $16,000 a year for additional expenses and savings, a much more comfortable situation. The roommate scenario also works on a lower income of $50,000 a year.
That doesn’t feel like doom and gloom to me.
It’s not just the income and expenses that parents worry about – it’s also general financial security. This is totally legitimate because life happens: phones need replacing, apartments need furnishing, friends need wedding gifts. Planning for these added costs means avoiding the credit card debt trap.
The take-away? Gen Zs need to create financial security right from the start. Priority one is to have an emergency fund – cash sitting around for expense over and above the norm. Having a couple of thousand dollars in savings account will help defray occasional or unexpected costs to avoid racking up credit card debt, a trap that can be hard to get out of as high interest costs eat up precious income.
Setting money aside in long-term savings should start with a Gen Zs first full-time job. The benefit of investing early cannot be exaggerated. The power of time and compounding makes it much easier to save for retirement and starting early builds a solid foundation that leads to financial stability and confidence.
Of course, not all Gen Z’s situations are the same: some will work lower-paying jobs, some will work in the gig economy, some will have student loans to repay. And we can’t ignore the fact that buying a home is much harder for them than for prior generations.
Financial security won’t be easy, but it’s also not impossible. Giving them good financial advice and the confidence to make their way will help.
Anita Bruinsma is a Toronto-based certified financial planner and a parent of two teenage boys. You can find her at Clarity Personal Finance.