Financial Struggles Weigh Heavily on Gen Z Mental Health in Canada

A significant number of young Canadians are grappling with financial stress, according to recent findings from a survey conducted by TD Bank. This demographic, referred to as Generation Z (ages 18 to 28), is facing a challenging job market marked by high unemployment rates and stagnant wages. As a result, many report that their economic struggles are adversely affecting their mental health.

The survey indicated that more than half of the respondents identified as young professionals, having been in the workforce for one to five years. Alarmingly, over fifty-three percent of those surveyed expressed a sense of pressure to maintain a successful image on social media. Additionally, nearly two-thirds (65 percent) felt they were financially lagging behind their peers, while sixty-six percent reported pressure to achieve financial milestones, such as home ownership, by specific ages.

The financial landscape in Canada has been shifting, with the gap between the wealthiest and lowest income households widening, as reported by Statistics Canada. The agency highlighted that younger individuals and those in lower income brackets are increasing their net worth and disposable income at a slower pace than their wealthier counterparts.

Rising Anxiety Among Young Canadians

Experts in mental health and economics are concerned that financial pressures are contributing to heightened anxiety levels among younger Canadians. “There’s always been an element of ‘keeping up with the Joneses,’ but now you’re seeing it constantly through social media and digital advertising,” noted Kaylie Tiessen, chief economist at the Canadian Shield Institute for Public Policy. She emphasized that the constant stream of curated online images exacerbates feelings of inadequacy, as individuals compare themselves to others who present an idealized version of success.

Dr. Martin Antony, a psychology professor at Toronto Metropolitan University, highlighted a troubling trend: “Over the last decade or two, we’ve seen an increase in anxiety among children and young adults.” He pointed out that the pressure to perform at higher levels and meet elevated standards is contributing to this rise in anxiety. The World Health Organization (WHO) reports that half of all mental health disorders in adulthood begin by age 18, often going undetected and untreated.

The unemployment rate in Canada surpassed seven percent in September 2023, with youth unemployment soaring to over seventeen percent, a notable increase from the previous year. This economic environment poses challenges for recent graduates as businesses hesitate to expand amidst trade tensions and fluctuating tariff policies.

Financial Pressures and Coping Strategies

The financial burdens faced by Gen Z are compounded by the rising cost of living. Nearly half of the respondents in the TD survey (47 percent) cited living expenses as their most significant barrier to achieving financial goals. More than a third (36 percent) indicated that their current income is insufficient for financial advancement. Furthermore, an overwhelming sixty-four percent reported experiencing financial stress multiple times a week, surpassing stress levels reported by older generations.

As Sumaiya Bhula, a senior manager at TD Bank Group, noted, “Social media amplifies stress beyond traditional financial concerns.” She explained that the unrealistic portrayals of success online can create additional pressure for young Canadians, making it harder for them to navigate their financial realities.

Experts emphasize that prolonged stress can lead to serious mental and physical health issues, including anxiety, depression, and other disorders. Dr. Antony warned that untreated stress could elevate the risk of various health problems, including high blood pressure and heart disease. He suggested that developing coping strategies is essential for managing financial-related stress.

“Tools for managing stress include strategies for problem-solving, improving job prospects, and managing anxiety,” Dr. Antony advised. Techniques such as mindfulness meditation, relaxation exercises, and social support can be effective. Additionally, working with financial professionals could aid young Canadians in budgeting and savings, providing a clearer path toward financial stability.

Bhula encourages young individuals to start their financial planning early, even with small contributions. “Start young, and start small,” she advised, highlighting that even saving $20 per month can help build a foundation for financial security. This proactive approach can alleviate anxiety and foster a sense of control over one’s financial future.

As the job market continues to evolve and economic challenges persist, it is crucial for young Canadians to find balance in their financial and mental health. The insights from these recent surveys underscore the importance of addressing both financial literacy and mental health awareness to support this vulnerable demographic in navigating their futures.