Financial Stress Threatens Mental Health of Canada’s Gen Z

A recent survey indicates that many younger Canadians are grappling with significant financial stress, which experts warn could adversely affect their mental health. The findings highlight the challenges faced by Generation Z, particularly as they encounter a tough job market, stagnant wages, and the pressures of social media.

According to a survey conducted by TD Bank, over half of the respondents aged 18 to 28 expressed concern about their financial well-being. The survey, which included more than 500 participants, revealed that 53 per cent felt compelled to project a successful image on social media, while 65 per cent believed they were lagging behind their peers financially. Additionally, 66 per cent of those surveyed reported feeling pressure to achieve financial milestones such as homeownership by a certain age.

The economic landscape in Canada is particularly challenging for young adults. Statistics Canada reported that the unemployment rate for youth exceeded 17 per cent in September 2023, a stark contrast to the overall unemployment rate of approximately 7 per cent. This disparity places younger Canadians at a greater disadvantage, with many struggling to make ends meet amid rising living costs.

Kaylie Tiessen, chief economist at the Canadian Shield Institute for Public Policy, emphasized the crisis faced by young workers: “Overall fewer jobs, fewer hours, and less pay means that they are really struggling to get by.” The report underscores a widening wealth gap, as younger and lower-income groups experience slower growth in net worth and disposable income compared to their wealthier counterparts.

The impact of social media on mental health cannot be understated. Dr. Martin Antony, a psychology professor at Toronto Metropolitan University, noted an increase in anxiety and perfectionism among young adults. “If you’re comparing yourself to other people who always seem better than you, we call those ‘upward social comparisons,’” he explained. This constant comparison contributes to heightened feelings of inadequacy, especially when individuals only present their best selves online.

The World Health Organization has highlighted that half of all mental health disorders in adulthood begin by age 18, with many cases remaining undetected. The financial pressures faced by Gen Z could exacerbate these issues, leading to severe mental and physical health complications if left unaddressed.

As living expenses continue to escalate, 47 per cent of respondents in the TD survey identified the cost of living as their largest obstacle to achieving financial goals. The stresses of financial instability appear to be particularly pronounced for younger Canadians, with 64 per cent reporting financial stress multiple times a week—higher than any other generational group.

Sumaiya Bhula, a senior manager at TD Bank Group, remarked on the unique pressures faced by Gen Z: “Social media really amplifies stress beyond traditional financial concerns.” She emphasized the need for young individuals to develop financial literacy and coping strategies to manage their stress and anxiety effectively.

Experts recommend a range of approaches to mitigate the financial and emotional strain. Dr. Antony suggests various stress management techniques, including mindfulness meditation, social support, and exercise. Furthermore, working with financial professionals can help younger Canadians develop effective budgeting and savings strategies.

“Start young, and start small— even if it’s $20 a month,” Bhula advised. Establishing a habit of saving early can pave the way for greater financial security and peace of mind in the long run.

As financial pressures mount, the need for comprehensive support and strategies for young Canadians becomes increasingly vital. Addressing these challenges not only benefits individual health but also fosters a more resilient and financially secure generation.