FinTok: How the cost of living crisis helped TikTok become a center for financial advice | Science & Tech News

Alongside the rising cost of living has been the rise of FinTok, the world of online personal financial guidance.

From breaking down a (old) mini budget to navigating the murky world of crypto, and even the best apps for investing, TikTok Finance is filled with content creators offering advice on how to survive the cost of living crisis.

This is not the first time people have turned to the platform for help, and budget recipes and energy saving hacks (including showering at the gym) going viral in recent months.

But as the cost of living increases, this new side of the app rises with it.

Moving beyond viral dances, cat videos and feta pasta recipes that made it popular in the pandemic, research by Ofcom shows TikTok is one of the top three sources of news for teenagers – up there with Instagram and YouTube.

From sweets at school to four figures a month

Poku Banks started as an entrepreneur selling sweets at school but turned his personal finance degree from Nottingham University into a source of income, sharing mentorship with his 341,100 TikTok followers.

Now, he said, he can make up to four figures a month from the platform, sharing tips including; The best way to finance a holiday with investment, advice on car finance or how to use freshers week as an entrepreneur.

With 41% of users between the ages of 18 and 24, TikTok is very popular among Gen Z.

“Growing up Gen Z, we have a short attention span and that’s life,” he says explaining why he prefers to condense complex topics into short videos.

Research by One Poll in October 2022 of 1,046 teenagers and 2,050 adults found 60% of people now choose social media as the best place for financial advice amid the cost of living crisis.

12-17-year-olds say they get the best money-saving tips from TikTok and say they value such advice more than what they get from their parents or school.

As a result, more than a third of the age group say they have put away between £100 and £500 in personal savings as a result of tips.

A TikTok spokesperson said: “TikTok is a place where millions of people come to have fun, but also to learn. As more people search for financial information online, it’s important for us to help our community access the right support and advice on TikTok, especially if they may be struggling to access it elsewhere.

“We have long partnered with Citizen’s Advice to produce informative videos and our #FactCheckYourFeed campaign. Most recently, we launched a new Cost of Living Hub – to bring together all the best tips from our community and help people make the right financial decisions for them.”

‘wealth bros’

A quick search on the hashtag #stocktok shows a video of the creator making “thousands of seconds” and promising “stocks that will make me rich in 2023”.

Laura Pomfret, from Financielle, said: “If people in our community ask us, should I invest in cryptocurrency, I will say, well it’s completely up to you but let me tell you what cryptocurrency is, I’ll tell you what some of The risk is so that you can make your own decision.

But with anyone able to create an account and upload a video – and there’s no real formula for what gets attention and goes viral – there are concerns about navigating the platform and how safe it is to follow some guidelines.

“I’m worried. On the Page For You [TikTok’s personalised homepage] yesterday the ‘wealth bro’ from America said you should finance the car and invest the money instead,” said Laura.

“[He was] promising a return that won’t happen, and when I see stuff like that it makes me worry.”

Searching for financial hashtags prompted a rebuke from TikTok, warning users that “all investments carry risk” and to never reveal personal information on the app.

It also provides tips on how to recognize a scam, and TikTok from Citizen Advice.

“I like, we all, don’t give financial advice,” Ellie Austin-Williams from This Girl Talks Money told Sky News.

“And a lot of people, this is a real misunderstanding. A lot of people are like, ‘wow, I need a financial advisor on TikTok, to tell me what to do’.

“A financial advisor, no matter how qualified they are on TikTok, cannot tell you what to do.

“That’s not allowed.”

‘I’ll never sell you anything’

As with all social media platforms, Ellie said there is a “proliferation of scammers” out there who impersonate her accounts.

“It was very bad financially,” she said.

“I will never sell you anything, I will never ask you to trade.

“It’s just a caution in the back of your mind that if something sounds too good to be true, it is.”

Poku adds that all the advice is based on his personal experience, and while they “can push you in the way, or direction, that we believe is the best”, both use disclaimers on their content, reminding users to only invest what they are. can afford, or remind them that no investment is guaranteed to return.

Women overload

Approximately 50 years ago, women could not open a bank account in their own name. Now, female entrepreneurs are using the TikTok platform to try to close that gender gap.

Laura Pomfret, along with her sister Holly Holland, started Financielle in 2016 while Laura was on maternity leave.

From a northern working-class background, the former lawyer said he was “just a waste of money as a graduate living in the city, spending everything I made” because he “never had a financial education”.

“This is a kind of female overload concept whether you are a mother or a daughter or whether you are the type you have been left out or this conversation, money feels overwhelming,” said the mother of three.

TikTok, he says, appeals as a platform because you have to condense the subject into short 60-second videos (although the app is now testing longer content, shorter videos remain some of the most popular).

“We wanted things that were short and snappy, that could cut through the noise and speak like that,” he says.

Amidst the confusion of the past few months – with mini-budgets announced and then withdrawn, two new prime ministers and several chancellors – Laura said: “There are a lot of economic terms tied up, and people are saying ‘I’m trying to make sure I can pay the bills. me and I’m trying to work out what’s quantitative easing is or whether the interest rate thing is going to impact me or not’.”

‘It’s all about my parents’

Ellie, 35, says This Girl Talks Money’s target audience is 91% female and mostly Gen Z.

When he started researching personal finance, he was frustrated by how everything was aimed at “my old age, rather than me” and felt that if more financial literacy was taught in schools, perhaps there wouldn’t be such a need for these online creators. fill in the gaps.

“What we need are mandatory sessions,” Poku added, though he was quick to caveat that he wasn’t blaming individual teachers.

“Every adult looks to invest, into a pension or on their own, we know we will get a credit card one day yet we are not told about the credit score.

“So basically, we’re thrown into the world and we don’t know anything.”

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