Don’t Be a Victim! The Real Story Behind TikTok Money Advice
TikTok is popular for a variety of reasons. There are trends, there are book recommendations for readers, and there are influencers.
While all of these should be taken with a grain of salt, especially since the intent is usually to sell something, one thing you should be careful heeding on the popular video app is money advice. Not all of it is beneficial and some of it misses critical key points. Yet, with Forbes Advisor reporting that 80% of younger adults get their advice from social media, it deserves some attention.
We’ve scoured TikTok for the latest money trends and advice going around.
1. Loud Budgeting
Reactions to this trend, which calls for you to be honest with your friends or family about your financial situation when invited out, are mixed. Some people say it helps prevent alienation if your loved ones know you have other plans for your money such as financial goals you’re working toward. Others say it’s cringe and your finances are your business only.
While there’s nothing wrong with loud budgeting, in theory, you should be careful about how much you reveal. It could put you in a bad position.
2. Underconsumption Core
One of the latest trends, called underconsumption core, calls people out for throwing out perfectly usable stuff. It started with Maya Feldman, an 18-year-old content creator from Germany. She showcased the stuff she still uses, such as clothes from middle school she still wears and an old hairdryer that still works.
The trend is to upcycle items you already have rather than throw them out. Have old towels? Use them for cleaning rags.
3. No Spend Challenge
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The no-spend challenge is exactly what it sounds like. The trend challenges people to go a week, a month, or even a year without buying anything non-essential.
In theory, it could have good temporary outcomes, but that’s all they would be, temporary. It’s not exactly a sustainable habit, because we do like to buy things for ourselves, necessary or not. On a long-term basis, budgeting for these expenses is a better solution.
4. Cash Stuffing
The cash-stuffing trend is nothing new. Many people have used this as a way to budget for decades. It involves separating spending money into different envelopes for different categories, such as groceries, clothes, and gas, to name a few.
The problem with putting money in envelopes is not only done it put your money at risk—lose cash and it’s gone, lose a debit card and you can report it lost and reclaim fraudulent transactions—it also eliminates the possibility of you making money by placing it in an account to earn interest.
5. 100 Envelope
The 100 Envelope trend challenges people to put away money in an envelope each day for 100 days. You would start the first day with $1, then $2 on the second day, $3 on the third day, and so forth. The idea is you’ll have $5,000 saved up in 100 days.
But, if you put that money in an envelope, providing nobody else touches it and it doesn’t go missing, you’ll have $5,000. If you put it in a high-yield interest savings account, you’ll have that $5,000 plus up to an additional 4% or 5%, depending. What sounds better to you?
6. Frugal February
Frugal February is a trend where people are challenged to tighten their purse strings in the second month of the year. Some have combined this with the no-spend trend while others are embracing the idea of being frugal, which doesn’t necessarily mean being cheap, but smart.
The problem with this trend is it can lead the way to excessive spending in March and beyond. As many know, denying yourself something is not the way to long-term success.
7. De-Influencing
Influencers on TikTok tend to, well, influence others to buy things. De-influencing flips that on its tracks. Instead of buying stuff, de-influencing encourages users to either not buy specific products that may be indulgent or to not spend altogether.
This trend despite its name is just influencing wrapped in another title. Eventually, like the others it will die down.
Do Your Due Diligence
Even if someone has a million followers on TikTok, it doesn’t make them an expert. It makes them relatable and they’re popular for a reason. That doesn’t mean you should trust the advice they offer.
Make sure you research the creator offering advice. Do they have a business outside of TikTok, a website? Do they have reputable credentials or experience to draw on? If the answer to all these questions is no, take the creator for what they are: pure entertainment, not an expert.
