On TikTok, Personal Finance Fills a Knowledge Gap
The internet has led to the democratization of knowledge in a number of areas, from beauty to home improvement to cooking. In recent years, another arena in which people have turned to YouTube and, more recently, social media, for guidance is personal finance. According to a recent report in Bloomberg, there’s more overlap between the world of influencers and personal finance than you might think, an effect that’s been heightened by the pandemic. While millennial bloggers and YouTubers pitched the financial independence, retire early (FIRE) movement in the 2010s, the 2020s are focused on Gen Z, and TikTok is the medium for financial wisdom. Per Bloomberg:
“This year, as the Covid-19 pandemic wreaked economic havoc around the world, young people have increasingly turned to TikTok as a source of financial literacy and tips for managing their money. Hashtags like #sidehustle, #personalfinance, #investing and #stocktips have drawn millions of views in just a few months, and videos about how to become a millionaire by 22, which credit card to get or how to open a brokerage account have become regular programing.”
While personal finance gurus are not new, the emphasis on get-rich-quick messaging seems to be overrepresented in the digital space at the moment. This makes sense given the uncertainty the pandemic has brought to almost every corner of the economy. But it also has to do with the medium through which these ideas are dispersed. Personal finance gurus like Suze Orman and Robert Kiyosaki and Sharon Lechter of “Rich Dad, Poor Dad” fame have pitched their ideas about saving and budgeting for decades, primarily through books. But as anyone who’s ever tried to create content on social media knows, people aren’t looking for the same old chestnuts when they seek advice online. “One weird trick” is what drives engagement.
That said, social media presents a unique opportunity for financial literacy to reach a younger audience, especially in the United States, where the subject is seldom taught in schools. (According to non-profit Next Gen Personal Finance’s 2019–2020 progress report, only six states require high schoolers to take at least one semester-long personal finance class.) TikTok in particular has the potential to present dense concepts like inflation, tax law, and retirement accounts in digestible, seconds-long bites. The graphics and editing abilities that are built into the app lend themselves well to educational content. There’s a reason why so many finance education YouTube videos seem a bit like PowerPoint presentations.
The risk of a dubious stock tip here or there might be outweighed by the benefits of reaching a demographic that’s traditionally uninterested in topics like credit and brokerage accounts. Simply seeing a video on, say, opening a retirement account might inspire a young person to give the topic thought. At S71, we work with creators to grow their audience across social platforms, including TikTok, with talent like Alonzo Lerone and Matthew Santoro. Like any other kind of social pressure, the drive to learn about money is not inherently a bad thing. As they say, knowledge is power. And when it comes to personal finance, knowledge is everything.