Playing with FIRE: Why financial independence looks different for young Canadians

The idea flared up again around 2017, making personal finance headlines and going viral on social media. Minimalism gained traction, and young Canadians sought out work-life balance and financial freedom. Beyond its true adherents, FIRE remains a highly clickable topic. Who isn’t curious about the possibility of retiring decades ahead of schedule?  

Generation Z and millennials are all about finding financial independence—not just for early retirement but for flexibility and financial security. But while the aspirations may be there, reality has its own plans. A new study by advisory firm Edward Jones shows Canadians are feeling the pressure of the high cost of living and mounting debt. Fewer Canadians plan to contribute to their retirement savings this year (39%, down from 49%). Young Canadians 18 to 34 show the biggest drop, with just 41% planning to contribute, down 19% from last year.  

Calgary-based certified financial planner Russ Dyck says that, in his experience, his Gen Z clients enjoy the work they do. They are less focused on retiring early but instead on building a solid financial foundation for any worst-case scenarios, such as a job loss. They seek some combination of security and flexibility. 

So, the question in 2025 is: Is some version of FIRE attainable for young Canadians, or has the rising cost of living turned it into yet another financial pipe dream? Let’s find out.

The cost-of-living squeeze

In 2025, Gen Z and Millennials in Canada are feeling the cost of living climb, making saving and investing a struggle. The dream of home ownership remains a far-fetched goal for many with the average home priced at $670,065—a 1.1% increase from 2024. And rent isn’t cheap either, at an average $2,152 a month (expect higher figures in major cities). 

This keeps home ownership out of reach for many, forcing more young Canadians to rent or stay at home longer. Not only could grocery prices go up another 5% this year but residents of eastern Ontario and Quebec could wind up paying $15,000 more for necessities, like food, housing and utilities than last year as inflation, housing shortages, a weaker dollar, and global tensions—including the U.S.’s implementation of 25% tariffs—drive up costs.

Young Canadians are feeling the financial squeeze. A survey by the Healthcare of Ontario Pension Plan found that 69% of Canadians under 35 are most concerned about the costs of day-to-day expenses, while 51% report living beyond their means—and not by choice. With student debt also holding them back, many struggle to save for the future, delaying milestones like home ownership and growing retirement savings.

More than one way to FIRE

Given those bleak statistics, Dyck says strict FIRE isn’t feasible for most Canadians.

“I don’t believe the traditional route of FIRE—aggressively saving 60% to 70% of income and living on the rest, and then having a Spartan lifestyle in retirement, is realistic anymore,” he says. “Saving 60%, 70% or 80% of income is hard for people, especially Gen Z. But also I don’t think Gen Z is looking to work themselves to the bone, just to retire early and then continue to live as frugally as possible.” 

Gen Z is well known for its pursuit of work-life balance, wellness, self-care and rejecting unnecessary hardship—all the opposite of a Spartan lifestyle. But that doesn’t mean financial freedom isn’t possible. 

FIRE? In this economy?!

Thankfully, there’s more than one way to save money with FIRE, with some alternatives offering a more realistic approach while still prioritizing smart saving and investing. Here’s how they compare to traditional FIRE: 

Traditional FIRE: The standard path to early retirement. You save 50% to 70% of your income until you reach approximately 25 times your annual expenses, allowing for a comfortable early retirement. That means the ability to travel, dine out and have hobbies. This approach takes longer to achieve goals than Lean FIRE, but can be more flexible.

Lean FIRE: The ultra-frugal route. Lean FIRE lets you retire early by drastically cutting expenses—think tiny homes, second-hand everything and an extreme no-frills lifestyle. This approach is faster to achieve but requires some significant sacrifices.

Coast FIRE: This FIRE approach requires you to build up a nest egg sufficient enough to fully finance your conventional (65-plus) retirement years. It factors in investment growth between now and your last day of work, just enough to cover daily expenses until the date arrives. This path offers career flexibility without constant financial stress.

Barista FIRE: Semi-retirement, but with less demanding work. This FIRE path means that instead of full retirement, you opt to work part-time for extra income and employee benefits, while still enjoying financial freedom. This tactic is ideal for those who aren’t ready to stop working entirely, even in retirement, but want to move into a lower-stress job, like a barista.

Baby FIRE: A slower, steadier approach to retirement. This approach focuses on moderate frugality and gradual wealth-building over extreme savings. Baby FIRE still aims for early retirement but with fewer sacrifices.

Fat FIRE: Is all about early retirement without compromise. This FIRE approach is for high earners who want to retire early without sacrificing the comforts of their current lifestyle. It requires saving 30 times (or more) of your annual expenses to fund a cushy retirement.

Some of these new approaches to the FIRE movment are more attainable than the original version, offering flexibility and financial security.

“Coast FIRE and Barista FIRE seem more palatable for Gen Z,” says Dyck. “It’s still being able to live for now, but also knowing that they’re working towards having that flexibility in the future. Having that balance is something that many of my younger clients talk about.” 

Smart money moves to start making now

Whatever path you choose, FIRE or not, the most important thing is to start saving for retirement as early as possible. There are plenty of practical steps you can take immediately for future financial independence despite economic challenges.

Dyck says young Canadians should aim to save at least 30% of their take-home income, using it to pay down debt and build savings. This helps avoid a financial shock when life expenses—like a home purchase or having kids—become a (costly) reality. 

Establishing an emergency fund is also advised, considering your personal needs and current job stability. For long-term savings, focus on tax-free savings accounts (TFSAs) or the first home savings account (FHSA). If buying a home isn’t a goal, open an FHSA anyways, as your contribution room is based on the number of years you have the account. 

For those carrying consumer debt, paying it down while simultaneously saving—balancing both as much as possible—will be key, Dyck says. And when it comes to real estate, renting rather than owning can provide flexibility and keep costs low. 

“Renting gives you the flexibility of only taking enough space and/or renting a property that covers your needs,” Dyck says. “That’s the philosophy of FIRE: to live below your means and/or reduce expenses. It’s not glamourous. Bachelor suites and renting bedrooms is all part of lowering your cost, so you can put more money towards savings.” 

Should you try FIRE?

To decide whether any level of FIRE is right for you, look at your goals, but also be realistic.

“Extreme FIRE is tough in today’s world, but a work-optional life is an achievable goal—and Gen Z can make it work,” Dyck says. “They just need to be clear on what they want and not necessarily just go and say, ‘I’m going to get FIRE for the sake of getting FIRE.’ It’s about getting clear what you want out of life. There’s definitely a version of FIRE that would fit and you’d be capable of making it work.”

Read more MoneyFlex columns:

• Mortgage Guide For Gen Z: The true costs of home ownership
• I hate working: What can I do about it?
• How to make more money in Canada: 6 side hustle ideas
• Underconsumption core: How to stop spending money

About Alicia Tyler

The Toronto-based journalist has 20 years of experience as an editorial leader in digital and print media, specializing in consumer and service journalism. Her work has appeared in Money.ca, MindBodyGreen and Hone Health.

Linkedin Twitter Website