Financial Pressures Threaten Gen Z’s Mental Well-Being, Experts Warn

Younger Canadians are grappling with significant financial stress, which experts warn could have severe implications for their mental health. A recent survey conducted by TD Bank revealed that more than half of Gen Z Canadians, aged 18 to 28, feel pressured to project a successful image on social media. This pressure often clashes with the reality of limited job opportunities, stagnant wages, and rising unemployment rates, particularly among youth.

According to the survey, 65 per cent of respondents believe they are financially lagging behind their peers. The findings highlight a concerning trend in which 66 per cent feel compelled to achieve financial milestones—such as home ownership—by a certain age. This pressure is exacerbated by social media, which contributes to unrealistic comparisons, as noted by Kaylie Tiessen, chief economist at the Canadian Shield Institute for Public Policy.

“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 phones,” Tiessen explained. The impacts of these pressures can be deeply concerning, especially if left unaddressed.

Rising Challenges for Young Canadians

Statistics Canada reported that the unemployment rate in Canada exceeded 7 per cent in September 2023, with youth unemployment significantly higher at over 17 per cent for students—a notable increase from the previous year. The gap between the wealthiest households and those with lower incomes continues to widen, with younger individuals facing slower growth in net worth and disposable income.

Psychology professor Dr. Martin Antony from Toronto Metropolitan University pointed out a troubling rise in anxiety and perfectionism among younger Canadians over the past two decades. “Most of us present ourselves in the best possible light online. If you’re comparing yourself to others who seem better off, the result is often upward social comparisons that can lead to increased anxiety,” he said.

The TD Bank survey indicated that 47 per cent of Gen Z respondents identified the cost of living as their primary obstacle to achieving financial goals. Furthermore, 64 per cent reported experiencing financial stress multiple times each week, outpacing other generations, including Millennials (55 per cent), Generation X (42 per cent), and Baby Boomers (27 per cent).

Consequences of Financial Stress

The implications of financial stress are far-reaching. According to the World Health Organization, half of all mental health disorders in adulthood begin by age 18, and many cases go undetected and untreated. Dr. Antony emphasized the correlation between stress and various mental health issues, including anxiety, depression, and eating disorders. “Stress is also linked to physical health problems, such as high blood pressure and heart disease,” he said.

To combat these challenges, experts recommend developing effective stress management strategies. Dr. Antony suggests learning problem-solving techniques, improving job prospects, and employing relaxation strategies such as mindfulness meditation and exercise.

Financial literacy also plays a crucial role in alleviating stress. “Start young and start small—even if it’s as little as $20 a month,” advised Sumaiya Bhula, a senior manager at TD Bank Group. “Building good financial habits will help alleviate anxiety and foster a sense of financial security.”

As the cost of living continues to climb, with consumer prices rising by nearly 2 per cent in August, the pressure on younger Canadians is unlikely to ease. With ongoing economic uncertainties, including the impacts of trade policies, the quest for financial stability remains a pressing issue for this generation.

Addressing these financial and mental health challenges will be essential to ensuring that young Canadians can thrive in a rapidly changing economic landscape.