Informal sector activities are prevalent in urban areas of Egypt, influencing young people's psychological well-being. An ethnographic study was conducted to gather qualitative data from participants who work or are associated with the informal sector in urban areas of Egypt, focusing on their psychological experiences and social interactions. A notable theme emerging from interviews is the high proportion (75%) of adolescents experiencing stress related to income instability and lack of job security within the informal sector. The study highlights significant mental health challenges faced by young people in urban Egypt due to their involvement with the informal economy. Counseling services tailored to address specific psychological needs should be developed for this population, particularly focusing on stress management and financial stability education.