Financial Pressures Heighten Mental Health Risks for Gen Z in Canada

A recent survey highlights the financial struggles facing many young Canadians, revealing a troubling connection between economic stress and mental health challenges. The study indicates that a significant portion of Generation Z is grappling with anxiety over their financial situations, compounded by limited job prospects and rising living costs.

According to a survey conducted by TD Bank, over half of young Canadians aged 18 to 28 report feeling financial stress. The survey, which engaged more than 500 participants, shows that more than 65% believe they are falling behind their peers financially. Additionally, 66% feel pressured to achieve financial milestones, such as purchasing a home or accumulating wealth by a certain age.

Economic Landscape Contributing to Rising Anxiety

Statistics Canada recently reported that Canada’s unemployment rate surpassed 7% in September 2023, with youth unemployment at a staggering 17%. This marks a troubling trend, particularly for recent graduates entering a challenging job market. Kaylie Tiessen, chief economist at the Canadian Shield Institute for Public Policy, emphasizes the severity of the situation: “The unemployment rate is the highest it’s been in the last 25 years outside of the pandemic or the Great Recession — we’re in crisis mode for this group.”

The financial pressures are exacerbated by the impact of social media, which constantly showcases seemingly perfect lives, intensifying feelings of inadequacy. Tiessen notes that social media fosters a culture of comparison, where individuals often feel compelled to maintain an image of success that may not reflect their reality.

Dr. Martin Antony, a psychology professor at Toronto Metropolitan University, points to a growing trend of anxiety and perfectionism among young adults. “We have seen an increase in anxiety in children and young adults over the last two decades,” he explains. The constant exposure to curated online lives can lead to what is known as “upward social comparisons,” where individuals compare themselves unfavorably to others.

Health Implications of Financial Stress

The World Health Organization has highlighted that half of all mental health disorders in adulthood begin by age 18, often going undetected. Those in Generation Z are particularly vulnerable, with a TD Bank survey indicating that 64% experience financial stress multiple times a week, more than any other generation.

Antony warns of the potential consequences of untreated stress, which can lead to severe health issues, including anxiety, depression, and even physical ailments like high blood pressure. “Stress is correlated with various kinds of mental health issues,” he states. The toll of financial strain can create a cycle of anxiety that further complicates young Canadians’ lives.

As living costs continue to rise, with August 2023 seeing nearly a 2% increase in consumer prices, the burden on this demographic is palpable. Many young Canadians are struggling to meet basic needs, further compounding their financial and mental health challenges.

For those in Gen Z, nearly half (47%) cited the cost of living as their primary barrier to achieving financial goals. More than a third (36%) reported that their current income is insufficient to get ahead.

Strategies for Coping and Financial Management

To combat the rising tide of financial stress, experts advocate for a range of strategies to help young Canadians cope. Antony suggests that learning problem-solving skills, mindfulness techniques, and establishing a support network can be vital in managing stress effectively.

Financial experts recommend starting small with savings, as even modest contributions can build a sense of financial security. “Start young, and start small — even if it’s $20 a month,” advises Sumaiya Bhula, a senior manager at TD Bank Group. Building consistent savings habits can alleviate anxiety and contribute to long-term financial planning.

As young Canadians navigate a complex economic landscape, addressing both financial and mental health challenges is crucial. With the right tools and support, it is possible for Generation Z to find balance and build a secure future, even in the face of mounting pressures.