FinTok: How the cost of living crisis helped transform TikTok into a financial advice hub | Tech News

With the rising cost of living comes the rise of FinTok, the online world of personal finance guidance.

From breaking down (formerly) small budgets to exploring the dark side of cryptocurrencies and even the best investing apps, Financial TikTok is filled with content creators offering advice on how to navigate the cost of living crisis.

This isn’t the first time people have turned to the platform for help, Budget Recipes and Energy Saving Tips (including bathing at the gym) has become popular in recent months.

But as the cost of living has grown, so has this new aspect of the app.

Ofcom research shows that TikTok is one of the top three news sources for teens, alongside Instagram and YouTube.

From school candy to four figures a month

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

Now, he says, he earns four figures a month from the platform, sharing tips including: using investing, auto finance advice or as an entrepreneur how to use Freshman Week to fund the best way to finance the holidays.

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

“Growing up in Gen Z, our attention spans are short, and that’s life,” he explains why he prefers to condense complex topics into short videos.

An October 2022 poll of 1,046 teens and 2,050 adults found that 60% now choose social media as the best place to get financial advice during a cost of living crisis.

12-17-year-olds said they get the best money-saving advice from TikTok and say they value it more than advice from parents or schools.

As a result, more than a third of the age group said they had deposited between £100 and £500 in personal savings as a result of these tips.

A TikTok spokesperson said: “TikTok is where millions of people come to have fun and learn. As more people seek financial information online, help our community get the right support and advice about TikTok right. Important to us, especially if they might have difficulty accessing it elsewhere.

“We’ve been working with Citizen’s Advice for a long time on informative videos and our #FactCheckYourFeed campaign. We recently launched a new cost of living hub – bringing together all the best advice from our community and helping people make the right decisions Financial decisions for them.”

“Fortune Brothers”

A short search under the hashtag #stocktok revealed videos from creators “making thousands in seconds” and promising “stocks that will make me rich in 2023.”

Financielle’s Laura Pomfret said: “If someone in our community asked us if I should invest in cryptocurrencies, I would say, it’s all up to you, but let me tell you what cryptocurrencies are and I’ll tell you some or the risks are That way, you can make your own decisions.”

But anyone can create an account and upload a video — and there’s no real formula for what attracts attention and goes viral — and there are concerns about how safe it is to navigate the platform and follow some guidelines.

“I do worry. On my For You page [TikTok’s personalised homepage] Yesterday a ‘rich brother’ from America said you should buy a car and invest your money,” Laura said.

“[He was] Promising returns that won’t happen, I get upset when I see something like this. “

A search of a finance hashtag brings up TikTok’s disclaimer, reminding users that “all investments carry risk” and never disclose personal information on the app.

It also offers tips on how to identify if something is a scam, and TikTok from Citizen’s Advice.

“I like, all of us, not to give financial advice,” Ellie Austin Williams, of the girl talking about money, told Sky News.

“For a lot of people, it’s a real misunderstanding. A lot of people will say, ‘Oh, I need a financial advisor from TikTok, tell me what to do’.

“Financial advisors, regardless of their credentials on TikTok, can’t tell you what to do.

“They’re not allowed.”

“I will never sell you anything”

Like all social media platforms, Ellie said there has been a “proliferation of scammers” impersonating her account.

“It’s especially bad in finance,” she said.

“I would never sell you anything, and I would never encourage you to trade.

“It’s just a little bit of a cautious situation in your head, and if something sounds too good to be true, it is.”

Poku added that all advice is based on their personal experience, and while they “may nudge you in the way or direction we think is best,” they all use disclaimers on their content, warning users to only invest in them Can afford it, or remind them that no investment can guarantee a return.

female overload

Less than 50 years ago, women could not open bank accounts in their own name. Now, female entrepreneurs are using their TikTok platform to try and close that gender gap.

Laura Pomfret and sister Holly Holland started Financielle in 2016 while Laura was on maternity leave.

The former lawyer, who comes from a working-class northern background, said she was “just a graduate living in the city, spending money like water” because she “never had any financial education”.

“It’s a concept of female overload, whether you’re a mother or a daughter, or whether you’re left out or in these conversations, money can feel overwhelming,” said the mother of three.

TikTok is attractive as a platform, she said, because you have to condense topics into short 60-second videos (though the app is now experimenting with longer content, shorter videos are still the most popular).

“We wanted something short and lively that would cut out the noise and tell us what it was like,” she said.

Amid the turmoil of the past few months – with a small budget announced and then cancelled, two new prime ministers and multiple prime ministers – Laura said: “There’s been a ton of economic provisions around, people saying ‘I trying to make sure i can pay my bill and i’m trying to figure out what amount Is the easing or the interest rate thing going to affect me. “

‘It’s all about my parents’

Ellie, 35, said the target audience for This Girl Talks Money is 91 percent women, mostly Gen Z.

When she first started researching personal finance, she was frustrated that everything was aimed at “my parents’ age, not myself” and thought that if more financial literacy was taught in school, maybe these online creators wouldn’t need to This fills the vacancy.

“What we need are compulsory classes,” Poku added, though he was quick to warn that he wouldn’t blame individual teachers.

“Every adult wants to invest in a superannuation or themselves and we know we’ll get a credit card one day, but we’re not told about credit scores.

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

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