By all accounts, Gen Z is shaking off the “reckless youth” stereotype — at least when it comes to their tax refunds.
A new survey from TD Bank, conducted by The Harris Poll Canada, shows that 76 per cent of Gen Z Canadians expecting a tax refund this year plan to invest it. That’s a staggering figure compared to just 60 per cent of millennials and 48 per cent of Gen X respondents. It might surprise some people, but it’s a sign that this younger generation is waking up to financial realities earlier than many before them.
And let’s be honest — they kind of have to. Between the cost-of-living crisis, ongoing inflation, and a murky economic outlook thanks in part to global instability and recession fears, Gen Z is entering adulthood in one of the most financially turbulent periods in recent memory. Unlike earlier generations who could afford to take a “wait and see” approach, today’s young adults are being forced to think long-term right out of the gate.
But here’s the catch: while Gen Z may be eager to invest, many still lack the tools and understanding to do it wisely. The same survey found that only 51 per cent of Gen Z respondents have a Tax-Free Savings Account (TFSA) — arguably one of the best tools for Canadians to grow their money tax-free. Even more concerning, 30 per cent of those without one say they don’t even know how a TFSA works.
That’s not just a financial gap — it’s an educational one. And it’s one that needs to be addressed.
The truth is, a TFSA isn’t just another place to park your money. It’s a flexible, powerful vehicle for both short-term goals and long-term wealth-building. As TD’s Pat Giles puts it, “Even small, consistent contributions can build serious financial confidence over time.” He’s right. Starting early with even modest investments can pay off in a big way — especially when the gains are tax-free.
Still, most Canadians are feeling the squeeze. According to the same TD survey, 90 per cent of respondents say they’re adjusting their financial strategies in response to economic pressures, and 67 per cent say those pressures are influencing how they’ll use their refund. TFSAs are part of the plan for 44 per cent of Canadians expecting a refund, while 31 per cent are planning to contribute to an RRSP. Those are promising numbers, but there’s still plenty of room for growth — especially among younger Canadians.
Interestingly, the way people use their TFSAs also varies widely. Some are splitting the account between long-term investing and short-term savings (29 per cent), while others are dedicating it solely to retirement (28 per cent) or immediate savings needs (18 per cent). This kind of flexibility is what makes the TFSA so powerful — and why it’s worth promoting more heavily, particularly to young Canadians just starting out.
At the end of the day, Gen Z seems to be signaling something important: they’re not waiting to get serious about money. They’re already there. What they need now is better access to financial education and tools that match their ambitions.
If we want to build a financially resilient future, it’s time we meet them halfway.
