The majority of young Canadians are stressed about their financial situation, while facing few job prospects, stagnant wages and high unemployment rates, according to a new study.
They also report that social media adds to the unrealistic pressure.
And experts say that if stress is left untreated, it can lead to more serious mental and even physical health problems.
“There's always been an element of 'keeping up with the Joneses,' but now we're seeing it all the time through social media, digital advertising and the algorithms that read the data on our phones,” said Kayleigh Thiessen, chief economist at the Canadian Shield Public Policy Institute.
“No one, whether it's an influencer or a friend or family member, posts a 'moody' photo. Maybe once in a while, but it's not like we're inundated with it every day.”
A TD Bank study asked more than 500 Gen Z Canadians (ages 18-28) about their financial well-being and found that more than half of them were young professionals with one to five years of experience.
Fifty-three percent of those surveyed said they felt they had to maintain a successful image on social media, but nearly two in three (65%) believed they were falling behind others financially.
66% said they feel pressured to achieve financial milestones like buying a home or building wealth by a certain age.
Statistics Canada reported in September that the gap between the wealthiest and lowest-income households continues to widen in Canada, with both younger and lower-income households experiencing slower growth in net worth and disposable income than wealthy and older Canadians.
How financial stress affects health
While the idea of people trying to meet or exceed the expectations and milestones of their peers may not be new, experts say there are signs that feelings of “anxiety” have increased among younger groups in recent decades.
“One of the things that we've seen in the last 10 to 20 years is an increase in anxiety and an increase in 'perfectionism' in children and young people, which is the desire to perform at a higher level and have higher standards and worry about being perceived as falling short of those standards. So it's not at all surprising to me that that's what we found in the TD study,” says Dr. Martin Antony, professor of psychology at Toronto Metropolitan University.
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“Most of us present ourselves in the best light possible online. We all know that we have a tendency to compare ourselves to others. And when we're constantly comparing ourselves to others who seem better than us, we call them 'upward social comparisons.' ”
According to the World Health Organization, half of all mental health disorders in adulthood occur by the age of 18, and most cases go undetected and untreated.
Canada's unemployment rate exceeded 7 per cent in September and continues to be significantly higher among young people, according to Statistics Canada.
The agency noted that the student unemployment rate was more than 17% in September, an increase of 3% from a year earlier.
It could be even harder for new graduates to break into an overall tough job market as companies pull back on expansion plans due to the trade war and U.S. tariff policy. Coupled with rising costs of living, including housing and food, young Canadians are reportedly struggling to make ends meet.
“If you look at young workers, job opportunities are decreasing. That's why the unemployment rate is the highest it's been in 25 years, outside of the pandemic and the Great Recession. We're in crisis mode for this group,” Thiessen said.
“Having fewer jobs across the board, fewer hours and lower wages means they are really struggling to make ends meet.”
What is holding Gen Z back from taking action?
Almost half (47%) of Gen Zers told the TD survey that the cost of living is the biggest barrier to achieving their financial goals, and more than a third (36%) said their current income is not enough to get ahead in the workforce.
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Meanwhile, two in three Gen Zers (64%) say they experience financial stress multiple times a week, more than any other generation (55% for Millennials, 42% for Gen X, and 27% for Baby Boomers).
Financial experts believe that beyond age, what sets Gen Z apart from other categories is how social media increases pressure to reach certain milestones that may not be realistic given the economic challenges, especially those facing younger Canadians.
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“There's pressure to 'keep it all together' in an uncertain economy with rising costs,” said Sumaiya Bourla, senior manager at TD Bank Group.
“Social media actually amplifies stress beyond traditional financial concerns. They (Gen Z) really feel the weight of peer, family, and online comparisons. Unfortunately, Gen Z feels much more anxious about maintaining what they see online, which may not be the reality for many individuals.”
The cost of living continues to rise, with consumer prices for goods and services rising nearly 2% in August. The Bank of Canada believes this may be a relatively good sign for now, but added that the outlook for tariffs remains “uncertain,” meaning there is still a significant risk of potential price spikes.
Another federal report on housing affordability found that low-income households “struggle to meet basic housing needs.”
Antony said that for some young Canadians who report financial hardship, “stress is a real risk factor” that, if untreated, can lead to more serious health problems.
“Stress is correlated with many different types of mental health problems, such as anxiety, depression, eating disorders, and drug use, as well as all kinds of emotional and behavioral problems. Stress is also associated with various physical problems, such as high blood pressure, headaches, and even cancer and heart disease,” says Antony.
“I don't want to say that people who are experiencing these stresses have some or all of these problems, but when stress lasts for a long time and people don't have the tools to deal with those stresses, the risk of developing those kinds of problems is higher.”
Tools to manage stress could include “a range of strategies” to deal with health risks, as well as financial strategies to help young Canadians find balance in their lives.
“There are a variety of strategies you can use to solve problems, improve your chances of getting a job, and learn strategies to manage anxiety and stress, such as mindfulness meditation and relaxation strategies, social support and exercise,” says Antony.
Working with financial experts helps Canadians, including Gen Z, take control of their savings, income and budgets, regardless of their financial situation.
“Start young and start small, even $20 a month. When you're looking to find your dream job, take a trip, or spend years with goals and aspirations, starting really young can help reduce anxiety and help you plan your finances,” Bourla says.
“It’s just a habit you develop to have financial security and peace of mind.”