Gen Z Money Habits: How to Catch Up and Improve Your Finances

When it comes to saving and investing, many Canadians are falling short. A recent TD survey found that only 49% of respondents believe they are saving enough for long-term goals, 45% say they lack confidence in their investing knowledge, and just 35% contribute regularly to a savings account. Despite the overall shortfall, one generation stands out: Gen Z.

The survey shows that 68% of Canadians under 27 are investing consistently, making them the most proactive age group when it comes to building money habits. That early momentum is promising, but the research also highlights important opportunities to make those efforts more effective and tax-efficient.

“I’m thrilled to see Gen Z taking the lead here,” says Pat Giles, Vice President of Saving and Investing Journey at TD. “They’ve grown up in an information-rich environment where accessing financial information is second nature, and social media makes examples of budgeting and investing highly visible.”

1. Don’t miss out on tax-free growth

While Gen Z is more active than older groups, many young investors are not using Canada’s most powerful savings vehicles. Giles points out that only six in ten eligible Canadian adults have a tax-free savings account (TFSA), and for Gen Z that share drops to about 50%. That suggests many young savers are building balances but not taking full advantage of tax-free compounding.

A TFSA lets you earn and withdraw investment income—interest, dividends and capital gains—tax-free. Over time, that tax-free compounding can significantly boost long-term wealth compared with holding the same investments in a taxable account. For young Canadians, opening and using a TFSA often makes sense as an early priority.

Other useful registered accounts include the first home savings account (FHSA), a newer tool designed to help first-time buyers save for a down payment, and registered retirement savings plans (RRSPs) for those who are targeting retirement goals. Choosing the right account for each goal helps maximize tax advantages and keeps savings aligned with timelines.

2. Confidence grows with practice and guidance

Nearly half of Canadians say they don’t feel confident investing, and that lack of confidence can stop younger people from starting. One persistent myth is that you need a large sum to begin saving and investing. In truth, the habit matters far more than the initial dollar amount.

Start small if necessary—setting aside $25 or $50 a month is enough to build momentum. Consistency is the key. Regular contributions, even modest ones, create a habit and allow compound returns to work over time.

Many young Canadians are combining online learning with in-person guidance. Giles notes that younger clients frequently visit personal bankers to validate what they’ve learned online and to get tailored advice. Booking an appointment with a qualified advisor or banker can help clarify your goals, confirm your plan and boost your confidence.

3. Treat finances like wellness

Gen Z is more likely than earlier generations to link financial routines with broader wellbeing. Think of budgeting like meal prep and investing like a regular workout—small, consistent efforts produce lasting results. Treat a financial checkup as a routine health check: review it annually or more often to ensure you’re on track.

Ask yourself the essential questions you’d cover in any wellness plan:

• What are my goals? (Short-term, such as a trip; medium-term, like a car; long-term, such as buying a home)
• What’s my timeline? (Months, years or decades)
• What’s my risk tolerance? (How comfortable am I with market ups and downs?)

4. Automate and avoid trying to time the market

Two common mistakes for new investors are waiting to accumulate a large sum before starting and attempting to time market highs and lows. In reality, timing the market consistently is nearly impossible—even professionals struggle to do it well.

The smarter approach is to focus on time in the market rather than timing the market. Automation removes emotional decision-making: set up scheduled contributions to a TFSA, FHSA or other investment accounts so your investing happens on autopilot. Automatic investing enforces consistency and helps you benefit from dollar-cost averaging over time.

5. Make saving a non-negotiable habit

Ultimately, financial progress is about behavior. The most important step is to build and maintain the habit of saving and investing. Start with what you can afford and increase contributions when your income rises. Even small amounts, invested consistently, compound into meaningful wealth over decades.

If you receive a raise or a tax refund, consider allocating a portion to your investments. Treat savings contributions like a fixed monthly bill—something you do before spending on extras. That discipline helps make long-term goals achievable.

The bottom line

Gen Z’s higher participation in investing proves that consistent saving can start early. To maximize those efforts, prioritize tax-advantaged accounts like the TFSA, automate contributions, seek guidance when needed, and view financial planning as part of your overall wellness routine. Above all, begin now—even modest contributions compound significantly over time.

As Giles emphasizes: start saving and investing now, even if the amounts feel small—time and consistent behavior are among your most powerful allies.

Read more about saving:

• 10 simple ways to save money
• How to save and invest smarter: What Canadians need to know
• How interest works in a savings account
• Money-saving tips and tricks for living single