Financial Pressures Heighten Mental Health Risks for Gen Z

A recent survey reveals that many young Canadians are grappling with significant financial stress, which is adversely affecting their mental health. The study, conducted by TD Bank, highlights that over half of Gen Z Canadians—those aged 18 to 28—feel compelled to portray a successful image on social media, while a substantial number express anxiety about their financial standings.

The survey, involving more than 500 respondents, found that 65 per cent of participants believe they are financially lagging behind their peers. Additionally, 66 per cent reported feeling pressured to achieve financial milestones, such as home ownership, by a certain age. Kaylie Tiessen, chief economist at the Canadian Shield Institute for Public Policy, stated, “We’re in crisis mode for this group,” noting the elevated unemployment rates among youth, which stood at over 17 per cent for students in September 2023.

Financial Factors and Mental Health Implications

The widening wealth gap in Canada is contributing to increased financial anxiety among younger generations. Statistics Canada reported in September that younger and lower-income groups are seeing slower growth in net worth and disposable income compared to wealthier individuals. This disparity has created an environment where financial struggles are compounded by external pressures, especially from social media.

Dr. Martin Antony, a psychology professor at Toronto Metropolitan University, explained that the phenomenon of “upward social comparisons” is exacerbated by social media platforms, where individuals often showcase only their best moments. “Most of us present ourselves in the best possible light online,” Dr. Antony noted, emphasizing that this can lead to feelings of inadequacy among those comparing their lives to curated online personas.

According to the World Health Organization, half of all mental health disorders begin by age 18, with many cases remaining undetected. The stress stemming from financial challenges can escalate into serious mental and physical health issues. Dr. Antony pointed out that untreated stress is linked to various health problems, including anxiety, depression, and even more severe conditions like heart disease.

Strategies for Coping with Financial Stress

The TD Bank survey revealed that nearly half of Gen Z respondents (47 per cent) identified the rising cost of living as their biggest barrier to achieving financial goals. Furthermore, 64 per cent reported experiencing financial stress multiple times a week, surpassing stress levels reported by other generations.

Financial experts suggest that developing coping strategies can help alleviate some of the pressures faced by younger Canadians. “There are various strategies that we can use that involve learning problem-solving techniques, improving job prospects, and managing anxiety and stress,” Dr. Antony advised. Mindfulness meditation, relaxation techniques, and social support systems can be effective in managing stress.

Sumaiya Bhula, a senior manager at TD Bank Group, encouraged young Canadians to begin managing their finances early. “Start young, and start small—even if it’s $20 a month,” she said. Building financial habits can foster a sense of security and alleviate anxiety as individuals pursue their personal and career goals.

As the cost of living continues to rise, with August 2023 seeing an increase in consumer prices, the economic outlook remains uncertain. While the Bank of Canada indicates potential positive signals, the risk of further price hikes looms due to trade tensions and tariff implications.

In light of these challenges, the call for increased awareness and management of financial stress is crucial. By addressing both financial and mental health issues, younger Canadians can navigate their economic realities more effectively, ultimately leading to healthier lives.