A snapshot of millennial and Gen Z finances

12 Minutes Read

How the ‘brokest generation’ and the ‘internet generation’ are changing the status quo


Millennials and Gen Z may enjoy a friendly rivalry online (don’t worry, we won’t be debating the merits of side vs. middle parts in this article) but they have at least one thing in common: the pressure of facing economic instability and financial anxiety in early adulthood.   

These experiences have led to a shift in priorities compared to previous generations, as they strive to overcome unique challenges that their parents simply never had to deal with. 

Millennials aren’t avocado toast eating industry killers and Gen Z aren’t meme stock trading tech addicts — those are stereotypes that misrepresent the hardships these generations have been shaped by.

We can get a better view of what’s going on in our economy and work towards meaningful change by being empathetic to the financial challenges of young people. It’s important to listen to them — they are the future after all!

In this blog, we break down the characteristics and priorities of the average millennial and Gen Zer and identify the major problems they’re facing. We also have some tips in store for anyone who belongs to these generations (we won’t tell you to skip your daily latte, we promise).



Born between 1981 and 1996, millennials (also known as Generation Y) have consistently faced economic uncertainty. They experienced both the 2008 financial crisis and the 2020 COVID-19 pandemic, and have felt the effects on employment and cost of living.

Following the 2008 recession, many millennials decided to broaden their earning capacity by taking out student loans and going back to school. Now, 1 in 3 American millennials have student loan debt — more than any other generation.

These conditions are the reason millennials have been called “the brokest generation” (ouch…). Dealing with crisis after crisis has unfortunately left them with less money to spend than the generations before them.

Millennials are also the first generation to grow up with the internet, which has heavily influenced the way they manage their money. For example, millennials popularised digital finance tools like budgeting apps and use mobile banking more than any other generation.


When you put all this together, it honestly makes sense that millennials have developed different priorities than their parents and grandparents. They often see their career and retirement trajectory differently. Instead of putting off enjoyment until retirement, they’re pursuing ambitions now — going for a dream job, starting a business, or travelling while holding off on buying a home, marriage, and kids. Millennials value a life with balance, so they don’t have to wait to do the things many people wait until they’re retired for — like travelling, volunteering, and pursuing hobbies.

But just because some millennials are holding off on buying a home, it doesn’t mean they don’t want to. According to a Bankrate survey, most want to own a home someday, or even right now. The top barriers to home ownership were cited as inadequate income, high home prices, and not being able to afford a down payment. 

Challenges millennials face

Poor economic conditions & an abundance of debt

Thanks to consistent economic uncertainty, many millennials feel like they’re a few steps behind. Those who entered the workforce during the Great Recession had fewer job opportunities and lower wages than previous generations. At the same time, the cost of tuition was rising, leading to high levels of student loan debt.

Despite being more educated, millennials earn 20% less than baby boomers did at their age. Wage stagnation has had a long-term impact on this generation’s ability to accumulate wealth and afford milestone purchases like their first home. Add high levels of inflation into the mix and the prospect of ever owning a home gets pushed even further away.

The housing market itself also presents a challenge to millennials as the prices of homes become unaffordable to them. Rising demand has caused home prices to skyrocket since the start of the pandemic. Recently, there’s been signs of cooling, but home ownership is still a challenging goal for young people to achieve.

Too many responsibilities

With many of their prime wage-earning years spoiled by recessions and a pandemic, millennials are simply exhausted.

They also have more financial demands than any other generation. Aside from day-to-day expenses like housing and groceries, millennials are saving for retirement, buying a home, building an emergency fund, and managing student debt. That’s a pretty full plate — it’s no wonder a Morning Consult study found that nearly half of millennials feel like they’ll never have the things they want in life because of their financial situation.

Overhauling the financial landscape

With so many financial responsibilities, it can be tough to accumulate wealth. Typically, investing is how you grow your wealth, but after the Great Recession’s impact on their finances, millennials grew skeptical of the stock market. Thankfully, advancements in technology are changing that.

As a tech-driven generation, millennials prefer online services. They also seem to have more trust in fintech — which makes sense after witnessing banks bail out the companies responsible for the economic crisis that suffocated them in 2008.

Fintech companies (like Flahmingo!) have been making investing more accessible. New technology means more millennials are choosing to invest — a Logica Research study found that 30% of millennial respondents are investing more than they were before the pandemic. Millennials are also opting for non-traditional investments like cryptocurrency and NFTs, and use exchange-traded products (like ETFs) more than any other generation.

The desire for more digital products and services isn’t just about convenience either. For example, buy now, pay later (BNPL) services have been very popular among younger generations, including millennials who are more apprehensive about credit cards. BNPL plans often don’t involve any interest — which is very attractive to a generation already drowning in debt.

BNPL must be used responsibly though, as it’s easy for things to get out of hand. The risk is that it might incentivise you to spend recklessly and accumulate debt. Pretty much anything has the potential for abuse, but these new services are completely changing the way young people use their money. With millennials being the largest living generation, that’s a big impact on the financial landscape — and with change comes uncertainty.

What should millennials do?

To the millennials reading this and relating to these experiences, we got you. Here are some things you can do to improve your situation:


To effectively accumulate wealth for the long term, saving alone won’t cut it. If your interest rate isn’t at pace with inflation, your savings become less valuable over time, as each dollar is worth less. That’s why investing is necessary for long-term goals. You should still, however, create a rainy day fund with about 3-6 months of expenses in case of emergencies or other unexpected costs.

Balancing an abundance of financial responsibilities might not have left you with a lot of cash to invest, but investing small amounts of money over a long period of time can be a more effective strategy than investing a larger sum later down the road because of compound interest (that just means you’re earning interest on interest).

Because you have so much time left in the workforce, you can stomach higher risk for higher-reward investments. It also means your portfolio has time to recover from any losses. (You don’t have to take high risk investments of course, there are many different types of investments with different risk levels to choose from — check out this blog for more information.) Considering your goals and timeline is a good place to start when deciding how much risk to take on.

Saving for retirement is a priority for you right now, so taking a long-term focus on your investments might be more beneficial than daily stock trading. To maximise your earnings for the long term, registered savings accounts come in handy.

Registered savings accounts

Registered accounts hold savings and investments long term and are great tools to help you save for big ticket items like your first home — they accumulate interest and other investment income tax free.

Registered Retirement Savings Plans (or RRSPs) are specifically designed for retirement — your contributions count as tax write-offs but your withdrawals are taxed. The benefit is that once you retire, you’ll be in a lower tax bracket and likely pay less tax than you would at the time of contribution.

On the other hand, Tax-Free Savings Accounts (or TFSAs) aren’t designed for a specific purpose but they still grow your income tax free in a similar way. The difference is that TFSAs are totally tax free (hence the name) — contributions aren’t tax-deductible and withdrawals are not taxable. Here’s a breakdown of how they work.

These accounts are very useful in helping you save for a home. The Home Buyers’ Plan for example lets you use your RRSP to save for a down payment. You can withdraw $35,000 from your RRSP account tax free — but you’ll have to pay it back within 15 years. You can find more details here.

The Canadian government also recently announced a new tax-free account called the First Home Savings Account (or FHSA), which allows Canadians to save up to $40,000 toward their first home. It’s kind of a hybrid between an RRSP and TFSA — contributions are tax deductible and investment income grows tax free, but withdrawals are also tax free.

As you can see, there are lots of options to help you get where you want to be. Everyone has different goals, so it’s best to do your research to figure out the most effective strategy for you.

Paying back student loans

Paying back your loans can be hard to balance with other financial responsibilities. You might think you have to start paying it all back as soon as possible, but depending on your goals that might not be the best strategy. For example, dedicating a large chunk of your income to paying back loans right now might not be worth it if you’re also trying to save up for a house.

A good thing about student loans is that you can customise the payment terms to better suit your budget and goals. If buying a home is more of a priority right now, you can extend the repayment period to lower your monthly payments. That way you can use the extra cash to contribute to a registered savings account instead. Figure out what you want, then use the loan repayment estimator to play around with different scenarios.

If you have more than one debt, rank them from highest priority to lowest. The avalanche method prioritises paying off high-interest debt first to minimise the overall interest you’re charged. This method usually saves time and money but staying on top of it can be difficult.

An alternate strategy is the snowball method, which aims to keep you engaged with smaller, more frequent victories. The snowball method prioritises your loans from smallest to largest, disregarding the interest rates. Once you’ve repaid the smallest debt, take that entire amount you were paying towards it and target the next smallest debt. As you move up your debts, the size of your payment snowballs.

It’s also important to remember that being in debt is not a bad thing (though it can be). Student loans are actually helpful — if you’re on top of your payments, you’re establishing a good credit history.

If you’re having trouble paying back your loans, there’s no shame in asking for help. Check out the Repayment Assistance Plan (RAP) — you might qualify for reduced payments or no payments at all.

We also have more tips on paying back student loans in our money hacks for students blog!

Gen Z


Gen Zers were born between 1997 and 2015 and are anywhere from 10 to 25 years old. They were too young to remember the impact of the Great Recession, but saw the lingering effects on their parents and millennial peers.

This generation was set to come of age during a relatively healthy economy…until the pandemic hit. Instead, their early adulthood has been defined by uncertain economic conditions similar to what millennials experienced.

Now this generation is trying to find their footing as young adults while the economy recovers. Thankfully, they’ve had the experiences of previous generations to learn from and after seeing how easily money can slip away during the pandemic, many Gen Zers are proactive when it comes to finances.


Gen Z is heading off to school or entering the workforce for the first time. They’re encountering new financial responsibilities and beginning to experience the world as adults. Their short term goals include moving out, graduating, saving, and starting their careers while their long term goals include paying off student debt, buying a home, and achieving personal goals (like travel, marriage, and having kids).

Like millennials, Gen Z is focused on having a solid work/life balance. They tend to be entrepreneurial, socially tolerant and environmentally aware, all of which affects their buying and saving habits.

Their finance habits are highly digital, which is to be expected from those labelled the ‘internet generation.’ With technology making investing more accessible and convenient, Gen Zers aren’t shying away from it. They conduct their own research before making trades and check their portfolios more often than other generations – they’re also testing the waters of non-traditional investments like exchange-traded products, cryptocurrency, and NFTs. 


Challenges Gen Zers face

A pandemic and the economic uncertainty that followed

While everyone was affected by the pandemic, the financial impact was distributed unevenly. Gen Z was dealt a pretty bad hand during the pandemic with their education being disrupted, career plans changed, and financial prospects reduced or completely eliminated — by April 2021, Gen Z accounted for about half of Canada’s drop in employment.

The economic scars on this generation aren’t disappearing anytime soon, with inflation and cost of living still on the rise. This leaves young people with less income to meet their short- and long-term goals.

High financial anxiety and burnout

The pandemic has also left Gen Z with high levels of financial anxiety — and we don’t really blame them. Younger workers are more vulnerable during periods of economic uncertainty, as they often have lower income. They compensate by taking second jobs or starting a side hustle, but this often exacerbates burnout and mental health challenges.

It’s worrying that this generation is already feeling burnout so early in their careers, but Gen Z has a pretty awful collection of stressors. With a high cost of living, low salaries, isolation due to remote work, and the normalisation of “hustle culture,” Gen Z are exhausted and overwhelmed.

Financial influencers and misinformation

As a highly digital generation (that has never known life without the internet), Gen Z are turning to social media for financial advice — 91% of Gen Z use social media for investing research, more than any other financial resource.

A Gen Z investment report found that almost a quarter (23%) of Gen Z see posts on social media about people making money from investing, so it’s understandable how meme stocks, NFTs, and cryptocurrency have gained popularity. This trend has caused some to adopt a ‘get rich quick’ mentality, leading them to make riskier investments that they expect to double or triple them in a short time. Unfortunately, these high-risk methods often mean money is being lost and not gained.

The decentralization of financial information is a great way to get more young people informed about personal finance, but the internet is full of misinformation and it can be a challenge to separate valuable advice from misleading claims — especially with the rise of “finfluencers” or financial influencers.

Education is getting more expensive

While a degree is often seen as an investment, some people are beginning to question if it’s worth the cost — especially as the cost of tuition has been rising every year. This rise in cost is partly due to a decrease in funding and an increase in the cost of living.

With an increased cost of living, many students turn to loans in order to afford their tuition and living expenses. But after seeing their millennial peers struggle after the student loan crisis, it’s totally valid that Gen Z are feeling nervous about it.

This struggle is amplified for international students in Canada, as they can only work 20 hours per week while they’re in school. They’re also excluded from opportunities like the Canada Summer Jobs program that help students find summer work.

If you’re a student or going to be a student, check out our money hacks for students blog as a survival guide to thriving financially during the school year and after graduation.

What should Gen Z do?

The strategies for millennials and Gen Z are quite similar, as both generations are still young and have more of their life ahead of them than behind them. Millennials are just a bit closer to those milestone purchases, but that doesn’t mean Gen Z should be putting off thinking about it.

Plan, Plan, Plan

Time is on your side, so the sooner you get started, the sooner you’ll be able to reap the rewards of your diligent planning. Consider your goals: do you want to avoid taking out debt for school? Do you want to own a home soon? What kind of investor do you want to be?

There are lots of things to consider and it can be overwhelming, but a budget is a good place to start if you don’t have one already. By figuring out how much money you get, spend, and save, you can reach your financial goals easier and reduce anxieties about finances. Basically, if you know where every dollar you earn goes, you know you’re living within your means and you have more control to buy the things you want.

Check out this great guide to budgeting from the Government of Canada.

Saving and Investing

As we explained earlier, saving alone is not enough to meet long-term financial goals. You have to invest your money and let it grow to avoid inflation eating away at your savings account.

While many Gen Z are already involved in investing, some are still apprehensive about it. You might think because you don’t have much extra cash laying around, investing is out of reach for you. The good news is, it’s not — commission-free and fractional investing are becoming more popular. You only need $1 to start investing with Flahmingo!

Plus, investing small amounts of money means any losses will also be small. Now is your chance to take more risk because if an investment doesn’t work out, your portfolio still has plenty of time to recover. Consider opening a registered savings account like a TFSA to hold your investments in — it’s never too early to start saving for the future.

Start establishing credit

Gen Z seems less inclined to use credit cards for several reasons, including lack of access, fear of debt, and the rise in popularity of BNPL.

If you’re avoiding credit because of fear or apprehension, there are things you can do to reduce that anxiety. First, increasing your financial literacy can help. Upon researching credit cards, you’ll come to learn that credit is a very important part of anyone’s financial health and incorporating healthy credit habits is far from impossible. You need a credit history for a number of things like getting a lease or a car loan, so it’s important to work on reducing this anxiety.

Second, work on developing healthy financial habits. For example, creating a budget can help you feel more confident in knowing your spending limits and prevent overspending. Once you get a credit card, always make your payments on time (even if you’re only paying the minimum payment) and avoid using your entire credit limit.

Dealing with burnout

First of all, know you’re not alone — 41% of millennials and 46% of Gen Z respondents in a 2021 Deloitte survey said they felt stressed about their financial circumstances all or most of the time.

While there’s not much you can do about some of the things contributing to your burnout, you can increase your awareness of the problem and speak up about it with friends, family, and even your managers. By sharing these experiences, you’re increasing visibility of the struggles of your generation, which can help in pushing for change.

If your job is the source of your burnout, you can either stick it out or move on. Most adults you talk to will say they had to tough it out in their 20s to enjoy their future lives, but you also don’t have to sacrifice your mental health for your job. When you’re young, switching jobs and seeking new experiences isn’t a bad thing. In fact, it can help you get a better idea of what you want out of life.

The bottom line

No generation is without challenges, but you have to admit millennials and Gen Z got the short end of the stick — both became adults in some pretty horrific economic conditions that we’re still dealing with. Despite the challenges they’re facing, young people are resilient and they’re driving the trend of being proactive with your finances — there’s a lot to learn from them!

Melissa Atefi