Alicia*, an art student in her late teens, started making money with her blog late last year. The only problem? You didn’t know what to do with it.
She is not alone. More and more teenagers and young adults are starting to make money online. This is where TikTok, the small, free-to-access video sharing platform, came in.
Some are starting to figure out their finances on TikTok to come up with a very personal and seemingly never-ending feed. This sounds great in theory, but problems arise when they don’t know how to properly spend, save or invest this money.
“Should I use it all for college expenses? Should I invest a portion of it? If so where? Was the few hundred dollars I earned taxable? My school never officially taught us about taxes, investments, or a budget, so I felt lost, Alicia told YR Media.
TikTok’s personal finance community, using hashtags like #FinTok and #StockTok, has millions of users and has become an important resource for students like Alicia.
“I came across an ‘Investing 101’ style post by chance in my feed, and realized: I have to learn how to manage my money. If schools don’t teach it, TikTok will teach it,” she said.
Experts believe that the TikTok format may also play a role.
“Due to the popularity of short video first via YouTube, then Instagram, and now TikTok, Generation Z has gotten used to consuming content in small portions, as opposed to long clips,” said Rob Hecht, Professor of Marketing and Social Media at Baruch College. . “We are in a situation where a lot of innovators are making money and want to learn investing, but not from an old-school financial analyst, but from someone who is on the cutting edge of current trends, knows fast, and gets straight to the point.”
There is also an inherent risk factor when teaching investments to young children. They can make mistakes and lose money. Who is responsible for that loss then? According to Hecht, schools and colleges don’t want to take risks.
Andrew Selebak, a professor of social media at the University of Florida, focused on knowledge that is filtered to future generations.
“Universities and K-12 education often don’t teach necessary life skills, so students don’t learn how to pay their taxes, invest or balance a checkbook,” Selebak said. “Schools have traditionally viewed these life skills as things that students naturally learn over time. But with each new generation, people neither learn these skills nor pass them on to their children.”
Like any other social media trend, “FinTok” comes with its own set of risks, according to Dr. Natalie Pennington, professor of communications studies at the University of Nevada, Las Vegas.
“When you talk about money and investing, risk and reward go hand in hand; and if you don’t have that skill set or knowledge to balance the two, you can count on one recommendation and lose it all. If it’s a top financial planner or planner (with credentials) sharing content and advice, this could be an account worth following,” Bennington said.
*Name has been changed to protect privacy.