Financial Strain Drives Mental Health Crisis Among Young Canadians

A recent survey reveals that a significant number of younger Canadians are grappling with severe financial stress, impacting their mental health. According to the TD Bank survey, more than half of Gen Z Canadians, aged 18 to 28, report feeling anxious about their financial situations, with many facing stagnant wages and limited job prospects. This financial strain is exacerbated by the pressures of social media, which often creates unrealistic expectations.

Kaylie Tiessen, chief economist at the Canadian Shield Institute for Public Policy, highlights the constant comparison culture fostered by social media platforms. “There’s always been an element of ‘keeping up with the Joneses,’ but now you’re seeing it constantly through social media, digital advertising and algorithms that read data on our phone,” Tiessen stated. The survey indicated that 53 per cent of participants felt compelled to portray a successful image online, while 65 per cent believed they were financially lagging behind their peers.

The findings also reveal that 66 per cent of respondents feel pressured to achieve financial milestones, such as home ownership or wealth accumulation by a certain age. Statistics Canada reported that the wealth gap continues to widen in Canada, with younger individuals and those in lower income brackets seeing slower growth in net worth and disposable income compared to their wealthier counterparts.

Increasing Anxiety Among Young Adults

Experts are noting a troubling trend of rising anxiety levels among younger generations. Dr. Martin Antony, a psychology professor at Toronto Metropolitan University, points to a cultural shift over recent decades. “We’ve seen an increase in anxiety in children and young adults, as well as a rise in perfectionism,” Dr. Antony explained. This desire to excel and meet high expectations can lead individuals to make unfavorable comparisons with their peers, particularly in the digital age.

The World Health Organization indicates that half of all mental health disorders in adulthood begin by age 18, often going undetected. With Canada’s unemployment rate exceeding 7 per cent in September 2023, young people are disproportionately affected, facing an unemployment rate above 17 per cent among students, marking a significant increase from the previous year.

Tiessen emphasizes the critical state of the job market for young workers. “The unemployment rate is the highest it has been in the last 25 years outside of the pandemic or the Great Recession — we’re in crisis mode for this group,” she noted. This challenging labor landscape, combined with rising living costs, places immense pressure on younger Canadians as they struggle to meet basic financial needs.

The TD Bank survey highlights that 47 per cent of respondents view the cost of living as the main obstacle to achieving their financial goals. Additionally, 64 per cent reported experiencing financial stress multiple times a week, more than any other generation surveyed.

The Role of Social Media and Financial Strategies

Financial experts assert that the unique challenges faced by Gen Z go beyond traditional economic pressures, largely due to the pervasive influence of social media. Sumaiya Bhula, a senior manager at TD Bank Group, underscores the impact of online platforms in amplifying stress levels. “Social media really amplifies stress beyond traditional financial concerns, where they are feeling the weight from their peers and online comparisons,” Bhula noted.

The continuous rise in living costs, indicated by a nearly two per cent increase in consumer prices for goods and services in August 2023, adds to the mounting financial pressure. The Bank of Canada acknowledges the uncertainty of the tariff outlook, heightening concerns about potential price spikes.

Dr. Antony warns that untreated stress can lead to serious health issues, both mental and physical. “Stress is correlated with various mental health problems such as anxiety, depression, and substance use. It can also lead to physical health issues like high blood pressure and heart disease,” he explained.

To combat these challenges, experts suggest various strategies for managing stress and financial health. “Learning problem-solving skills, improving job prospects, and managing anxiety can be helpful. Techniques such as mindfulness meditation and social support can also alleviate some of the pressures,” Dr. Antony advised.

Moreover, financial planning from an early age can significantly impact long-term well-being. Bhula encourages young Canadians to adopt positive financial habits. “Start young, and start small — even if it’s $20 a month. Building that habit fosters financial security and peace of mind,” she emphasized.

The intersection of financial stress and mental health presents a significant challenge for younger Canadians, necessitating targeted support and effective coping strategies to navigate these turbulent times.