WEDNESDAY, JULY 2, 2025 | THE GLOBE AND MAIL G B9 GLOBE INVESTOR REPORT ON BUSINESS | D erek Stenman, 32, joined Goodlife Fitness after graduating from universi- ty and has been faithfully com- mitted to the gym for almost 10 years. However, he was recently bombarded with promotional material for a high-end gym in Ottawa called Altea, which opened in November, 2024. The promised perks were tempting. For a monthly minimum of about $140, Altea members re- ceive access to a 129,000-square- foot facility fully equipped with steam cabins, pickleball courts and a smoothie bar. By compari- son, the most basic membership at Goodlife costs $76 a month but lacks some of those bells and whistles. “It was going to be this mas- sive new space,” Mr. Stenman said about Altea. “It would be kind of a fun, different new change.” Health and fitness are prior- ities for those from younger gen- erations, like Mr. Stenman. How- ever, when gyms start offering spa amenities such as saunas and boutique fitness classes, the line between essential health spending and luxury can get fuzzy. Despite the lavish offerings at Altea, Mr. Stenman has decided to stay with Goodlife, which meets all his health and fitness needs for $52 a month, thanks to a 30-per-cent discount from his employer. This allows him to stash away more of his savings for a down payment for a future home. However, unlike Mr. Stenman who uses the workout equip- ment on his own, his fiancée Leah Flewelling goes to a spin studio downtown for $175 per month. She said she enjoys the classes because they help her stay motivated. When she was working from home during the pandemic, Ms. Flewelling noticed a decline in her physical and mental health because of a lack of movement. Since then, she began to consid- er fitness and mental health a necessary expense. “These things are almost es- sential for us. We treat them the same way that we do our grocer- ies or our rent,” Ms. Flewelling said. “The benefits far outweigh the actual financial cost of them.” According to a survey by McKinsey & Co., young people are spending more money on health and wellness products compared with other genera- tions. While Gen Z and millen- nials make up just over a third of the U.S. adult population, they drive more than 41 per cent of annual spending on wellness. Apart from just fitness and nutri- tion, they’re also willing to de- vote more of their income to mental health, appearance, mindfulness and sleep. Not unlike Ms. Flewelling, Al- lisha Lin, 25, defines wellness as taking care of yourself. For her, that definition is broader than tending to your health in a med- ical sense. It also includes doing things that contribute to mental peace and increased confidence. Ms. Lin spends $120 a month on a Movati gym membership in Ottawa from November to April, and $1,500 on a golf membership for the summer months. For her, Movati is worth the money be- cause it offers classes such as hot yoga, which not only help her stay fit, but also manage anxiety and practise spirituality. For Ms. Lin, health and well- ness spending doesn’t end with fitness. It also includes things like supplements, cookbooks, self-help books and skin care. “If I don’t take certain supple- ments, or if I don’t eat properly, or follow a specific routine, or go to the gym – things in my life will start to fall apart,” she said. “I’ll start to feel more anxious, or I’ll start developing back pain or stomach issues.” People’s priorities vary when it comes to wellness. As a finan- cial planner, Jodie Stauffer said her job isn’t to tell people what they should and shouldn’t spend money on. When it comes to de- termining what is essential or ex- tra, people have to answer this question for themselves and then develop a financial plan ac- cordingly. “It depends on what the per- son values,” she said. “But also what they can afford.” Ms. Stauffer says she’s noticed younger generations can feel overwhelmed by long-term goals such as buying a house or saving for retirement, sometimes giving up altogether. While the boomer generation may have been able to purchase a home for one to four times their annual salary, now it costs considerably more. “Younger generations feel re- ally concerned that they’re never going to have houses and this type of lifestyle,” Ms. Stauffer said. “It’s kind of like they’re throwing their hands up in the air and saying: ‘Well, I’m not even going to try because I don’t feel like I can get there, so I might as well spend all my mon- ey.’ ” However, she encourages young people to remember that even small contributions over time will add up to big savings. When deciding how much you can afford on wellness, see how much you have left over at the end of the month. After calculat- ing all your core expenses, 20 to 30 per cent should be siphoned into savings, and then the rest can be used for discretionary spending. At 58, Shilpa Patel can say she’s invested in her well-being throughout her life. She said that every cent she’s put into gym memberships, nutritious food, fitness equipment, supplements, acupuncture and any other health-related expense has been worth it. “I’m lucky I’m in the financial position to do that, but I also budget for it,” Ms. Patel said. If there is a subscription, treat- ment or product that will help keep her and her family well, she’s willing to try it. Being healthy “is the greatest wealth,” Ms. Patel said. Special to The Globe and Mail When does wellness become a splurge? Young people are spending more on health and fitness, including on extras that add to the cost JULIA STRATTON While Gen Z and millennials make up just over a third of the U.S. adult population, they drive more than 41 per cent of annual spending on wellness. FRED LUM/THE GLOBE AND MAIL F or many young Canadians, home ownership is a dream. Millennials and Gen Z are grappling with still-sky-high housing prices, rents that remain expensive despite a recent drop and wages that haven’t kept up with inflation. And without homes, they’re shut out of one of the most pow- erful financial tools available to homeowners: the home equity line of credit, or HELOC. When you borrow to buy a house, the bank is often eager to loan you even more money through a HELOC. It’s a low-inter- est borrowing option that lets homeowners access tens or even hundreds of thousands of dollars on demand. And it can be a finan- cial lifeline for car repairs, job losses, education costs and life’s unexpected emergencies. Renters don’t have that luxury. Without a home as collateral, they’re left navigating the more expensive world of unsecured personal loans. These can be diffi- cult to understand. Unlike mort- gage rates, interest rates aren’t widely posted and it’s not readily apparent how to qualify. This is the divide in Canada’s borrowing landscape: homeown- ers on one side, renters on the other. Ryan McKinley, senior mort- gage development manager at Vancouver-based credit union Vancity, says the issue for renters isn’t just a lack of collateral. It’s al- so a lack of information. “Unsecured loans just aren’t talked about the way mortgages are,” he says. “It can be intimidat- ing.” As a result, many people don’t know what’s available or how to begin. Eva Wong, co-founder and COO of fintech provider Borro- well, which specializes in low- cost personal loans and free cred- it scores, says 88 per cent of the platform’s users aged 20 to 39 don’t have a mortgage. Among that group, 65 per cent carry a personal loan, line of credit, or both. Younger Canadians without homes are taking out personal loans for a variety of reasons. Some borrow to consolidate debt or cover emergencies such as car repairs or job losses. Others use personal loans to fund going back to school, starting a business or major life events such as a wed- ding. A 2020 study by credit-report- ing agency TransUnion found that 16 per cent of Gen Z adults in Canada (born after 1994, in the study) held a personal loan – four times the percentage in the U.S. For this generation, personal loans ranked as the third most common form of credit after credit cards and student loans, and they continue to be a popular way to borrow. In 2024, the num- ber of Gen Zers in Canada taking out personal loans rose 28.7 per cent over the previous year, after increasing 31 per cent year-over- year in 2023, according to figures provided by TransUnion. So what do you need to know before applying for a personal loan? First, understand that the interest rates will be a lot higher than a HELOC. According to figures provided by National Bank, unsecured per- sonal loan rates average from 8 to 12 per cent, though the bank stresses rates vary based on an in- dividual’s financial situation. By contrast, as of June, National Bank’s HELOC variable rate was 5.95 per cent. But that’s only part of the pic- ture. Homeowners with HELOCs can often make interest-only pay- ments, keeping their monthly costs low. Personal loan pay- ments, on the other hand, cover both interest and principal, which can substantially increase monthly expenses. An example from Ratehub.ca illustrates this point: A renter earning at least $100,000 a year with a very good credit score (725 to 759) could currently expect to pay a minimum of 8.99 per cent interest on a $25,000 unsecured personal loan. Monthly pay- ments would be $519 for the five- year term. A homeowner borrowing the same amount through a HELOC at a current 5.45-per-cent interest rate would only need to make monthly payments of $114. Before taking out an unse- cured personal loan, financial ex- perts say it’s important to ask whether borrowing is truly neces- sary. Ideally, you’ve built an emer- gency fund for unexpected ex- penses. If not, family help may be your next best option, says Alim Dhan- ji, senior financial planner at As- sante Financial Management in Vancouver. The Bank of Mom and Dad likely won’t charge you inter- est and may offer flexible repay- ment terms. That alone can save you hundreds or even thousands of dollars. If you do need to turn to a bank, experts say preparation is key. Start by checking your credit score. It’s a major factor in deter- mining whether you’ll be ap- proved and what your rate would be. According to credit-reporting agency Equifax Inc., a score of 660 to 724 is “good” creditworthi- ness,725 to 759 is “very good” and 760 and above is “excellent.” Next, build a case for your loan, why it’s needed and how you’ll re- pay it, Mr. Dhanji says. Creating a basic budget or cash-flow state- ment that outlines your income, expenses and savings can go a long way in reassuring a lender. It may even help you qualify for better terms. “You want to show the bank that you can repay this loan and help build your case to get a bet- ter interest rate,” he says. Having a loan co-signed by a property owner (hello, mom and dad again) may help lower your rate, too. As for those interest rates, a good place to start comparison shopping is Ratehub.ca. It tracks interest rates for personal loans, though doesn’t distinguish be- tween secured and unsecured lending. Natasha Macmillan, senior business director of everyday banking at Ratehub, says many people focus on the total loan amount but overlook how much it will cost them. “Think about what you can realistically afford to pay every month,” she says. Understanding the fine print of a loan is equally important. Some loans come with upfront fees (typically called administra- tion fees or origination fees), and others have penalties for early re- payment. If you plan to pay off the loan ahead of schedule – say, with a year-end bonus – make sure the lender doesn’t charge you extra for doing so, says Tyler Thiel- mann, president and CEO of Van- couver-based fintech provider Spring Financial. Also keep an eye out for loan products that fit your needs. These may offer lower rates or more flexible terms. Banks have specialized loans for consolidat- ing debt, buying a car or paying for school. TD’s student line of credit, for example, lets you withdraw funds as needed and pay only in- terest while studying, with repay- ment starting after graduation. Vancity offers a “Planet-Wide Transportation Loan” for those buying electric vehicles or e- bikes. But avoid applying for multi- ple loans at once in hopes of find- ing the best deal, says Borrowell’s Ms. Wong, as each application triggers a “hard hit” on your cred- it score. If lenders see too many of these in a short time, they may as- sume you’re in financial trouble, which could affect your ability to get a loan or raise your interest rate, she says. One alternative to a personal loan is an unsecured line of cred- it, which allows you to tap funds as needed, just like a HELOC. As of April, the average rate for an un- secured line of credit from a char- tered bank was 8.32 per cent, ac- cording to the Bank of Canada. A line of credit can be ideal for filling emergency needs such as car repairs. “You don’t have to reapply each time you need the money. It’s there, ready to use,” Mr. McKinley at Vancity says. Plus, it’s less expensive than put- ting big expenses on a credit card, which comes with hefty double- digit interest rates. But discipline is crucial, Mr. McKinley says, noting it’s easy to let an open line of credit become a crutch for everyday spending. He suggests resisting that tempta- tion and using it only for genuine needs – then, as with any loan, paying it down as quickly as pos- sible to avoid long-term interest costs. Special to The Globe and Mail For homeowners, borrowing money is easy. It’s tougher for renters ROBERT GERLSBECK The Bank of Mom and Dad likely won’t charge you interest and may offer flexible repayment terms. That alone can save you hundreds or even thousands of dollars. A mixed day of trading left the U.S. stock market split on Tues- day as Wall Street’s momentum slowed after setting record highs in each of the past two days. The S&P 500 dipped 0.1 per cent for its first loss in four days. The Dow Jones Industrial Aver- age rose 400 points, or 0.9 per cent, and the Nasdaq composite fell 0.8 per cent. Tesla Inc. tugged on the mar- ket as the relationship between its chief executive, Elon Musk, and U.S. President Donald Trump soured even further. Once allies, the two have clashed recently, and Mr. Trump suggest- ed there’s potentially “BIG MON- EY TO BE SAVED” by scrutinizing subsidies, contracts or other gov- ernment spending going to Musk’s companies. Tesla fell 5.3 per cent. It has lost just over a quarter of its val- ue so far this year, 25.5 per cent, in large part because of Mr. Musk’s and Mr. Trump’s feud. Drops for several darlings of the artificial-intelligence frenzy also weighed on the market. Nvi- dia Corporation’s decline of 3 per cent was the heaviest weight on the S&P 500. But more stocks within the in- dex rose than fell, led by several casino companies. They rallied following a report showing bet- ter-than-expected growth in overall gaming revenue in Ma- cao, China’s casino hub. Las Ve- gas Sands Corp. gained 8.9 per cent, Wynn Resorts Ltd. climbed 8.8 per cent and MGM Resorts In- ternational rose 7.3 per cent. Automakers outside of Tesla were also strong, with General Motors Co. up 5.7 per cent and Ford Motor Co. up 4.6 per cent. All told, the S&P 500 slipped 6.94 points to 6,198.01. The Dow Jones Industrial Average rose 400.17 to 44,494.94, and the Nas- daq composite fell 166.84 to 20,202.89. The overall U.S. stock market has made a stunning recovery from its springtime sell-off of roughly 20 per cent. But chal- lenges still lie ahead, with one of the largest being the continued threat of Mr. Trump’s tariffs. Many of Mr. Trump’s stiff pro- posed taxes on imports are cur- rently on pause, and they’re scheduled to kick into effect in about a week. Depending on how big they are, they could hurt the economy and worsen infla- tion. ASSOCIATED PRESS Wall Street is split as Tesla and tech drop while most other U.S. stocks climb STAN CHOE NEW YORK