TikTok teaches people to manage their money. But this is only a place to start. : NPR

Erin Confortini, 23, was teaching herself budgeting and investing in college when she realized she didn’t know much about personal finance — even as a finance major.

Today, he shares the details of his financial life with hundreds of thousands of people online.

In a recent video posted on TikTok, he told viewers exactly how much of his twice-monthly $2,773 salary goes toward taxes, insurance and retirement: $520, $25 and $305, respectively. in fact. It got more than a million views.

Without the national requirement for financial literacy in high school, teenagers and twenty-somethings are looking for ways to save, budget and invest. And social media, especially TikTok, has become a book.

But personal finance experts — including content creators themselves — caution that social media should only be a starting point.

Who do you trust?

You can’t believe everything you read on the internet – or scroll past on TikTok. Sometimes there are competing messages, and influencers may recommend different things.

Confortini, who works full-time as an internal auditor but moonlights as a personal finance content creator, is one of dozens of social media influencers who create their own personal accounts. financial journey to a side hustle, scoring brand deals to develop fintech companies’ products and selling downloadable templates of their budget spreadsheet.

“It really depends on who you trust,” says Grace Lemire, 24, a content creator from Massachusetts.

Lemire covers topics like saving, traveling on a budget and the best new credit cards. He also talks about how to deal with money conflicts with friends and family.

“There are people who agree with the content I post, and they trust me and therefore they trust my advice,” said Lemire, whose TikTok videos have garnered more than two million views. “But there are people who don’t agree with my content and therefore they don’t trust my advice.”

Lemire is paid by brands to advertise products — he earned $1,600 from content deals in January and is set to earn $6,600 in February — and he says he vets companies before agreeing. to promote their goods.

“It’s a big role to have,” he said. “You want to make sure you’re doing it right because the stakes are so high.”

Nearly 80% of Americans between 18 and 41 get financial advice from social media, according to a survey by Forbes Advisor and market research firm Prolific. But financial advisers warn there are pitfalls.

Financial planner Lazetta Rainey Braxton says it’s “amazing” that social media influencers inspire people to get their finances in order, but influencers can’t provide in-depth financial advice. There is no substitute for professional, time-honored expertise, he said.

“Most people want to do the least amount of work and get the most benefit,” Braxton says. “That’s why TikTok is so attractive. Like, what can you tell me in a sound bite that will save me some time and give me exactly what I want.”

In addition, while social platforms can introduce people to new terms and ideas on how to save money, it can be dangerous to open new savings and investment accounts without fully understand the fine print, says Helen Ngo, an Atlanta-based financial planner.

“TikTokers bring awareness, but videos don’t bring them enough [of a] timeframe to clarify the context around what is legal and illegal to do,” Ngo said.

Ngo says he recommends his clients do three things: open an emergency savings fund account, set financial goals for the next one to five years and then consider purposes beyond that.

There is nothing new under the sun

Sharing financial gains and losses with strangers online is nothing new.

In 2010 and 2011, bloggers created the same kind of relevant content, sharing their stories about getting out of debt and achieving financial milestones – just like TikTok influencers did. today. Mandi Woodruff, 35, followed that burgeoning scene back then. She is a career coach who hosts a podcast about wealth building for women of color and a former personal finance reporter.

“What really launched my career was helping millennials overcome and recover from the Great Recession,” Woodruff said.

Now, Woodruff says he’s happy to see more people getting into the personal finance field. What he loves about blogging — and what he sees in social media today — is its power to share information.

“It removes a lot of the barriers that are traditionally in place for young people and especially for people of color,” Woodruff said.

Often, people start learning to save and invest from their parents or close relatives, often leaving out people from under-resourced groups, Woodruff said. “Our parents often don’t have the resources or knowledge on their own.”

A desire to learn

For Anisha Singhal, a senior at Stuyvesant High School in New York City, learning personal finance is a priority. While she found helpful information about student loans and college scholarships on social media, not all of the content recommended to her was directly applicable to her.

“With TikToks, the whole idea is to get your attention and you think, like, oh there’s some kind of hack here — some little loophole that I can get a lot of money from,” he said.

In January 2021, Singhal wrote an article about the lack of financial literacy skills among teenagers in his school paper, prompting teacher David Peng to launch a personal course on finance, which is offered as a math elective.

And the class is full – Singhal didn’t get off the waiting list until this year, the second year it was offered.

Peng said his students were very active during the lessons, and many other students asked to audit the course.

“Personal finance is a very hands-on course. You have to experience some of the decision-making that adults have to go through,” he said.

Peng, who is in his mid-30s and attended Stuyvesant himself, did not learn personal finance as a student.

While he acknowledges that a lot can be learned online, Peng says it’s hard to get a lot of nuance out of short-form videos.

Singhal says social media can help – but it ranks below his personal finance course and his parents as a source of financial advice.

Too much information

“You have to do your own research. One thousand percent,” said the career coach Woodruff, who cautioned that people should never act on financial advice without evaluating its benefits in their own financial situation.

Many content creators advise their viewers to find other resources. Confortini, for example, often encourages his followers to seek information beyond the platform and admits that social media can feel like “information overload.”

“I can’t, in a three-minute TikTok video, tell you everything you need to know about personal finance,” he said.