TikTok: The Oracle of Gen Z Finance 

Is TikTok Finance the Right Place?

TikTok isn’t just where Gen Z learns the latest dance craze – it seems to be where they’re getting their financial news. And let’s just say, this economic outlook is like the diss tracks between Drake and Kendrick Lamar. This isn’t going to end well. While economists might argue about the “strength of the market,” for many young adults, scrolling through their For You Page (FYP) paints a bleak picture – unavoidable debt, sky-high house prices, and the ever-present need to own the latest designer bag. Talk about a recipe for financial FOMO.

And we do want to acknowledge that not everyone is getting their “facts” from finance TikTok, but it does seem to be very influential based on what we’ve seen.

The Disconnect: “I’m Broke, But I Bought the Viral Moisturizer”

TikTok’s got Gen Z feeling like they’re on a roller coaster designed by someone who loves surprise fees and hidden costs. You may be hearing things in one feed about getting ready for the economic apocalypse or in another timeline (depending on the day) saying to “live a little,” or “you deserve to treat yourself.” Newsflash: those conflicting videos about imploding economies and must-have luxury purchases can give you serious financial whiplash. This disconnect has led to what financial advisors call “money dysmorphia” – a warped view of one’s finances. Sure, Gen Z might be juggling debt and eating ramen, but they’ve got that $100 moisturizer, so… are they actually winning?

The Data Gets Confusing

Let’s talk numbers. Gen Z has seen their debt skyrocket. Yet, those same young folks with maxed-out cards, and some owning a few assets saw their wealth quadruple in recent years. This is what’s confusing.

  • Unpacking the numbers: It’s important to understand that “wealth” and “debt” aren’t always opposites. Rising wealth can be due to factors like increases in asset values (homes, stocks) or even pandemic-related savings. It doesn’t automatically negate existing debt.
  • The debt trap: Emphasize that while some assets increased in value, so did the cost of living. It’s easy to feel wealthier on paper, but harder to make those gains translate to buying power if inflation outpaces income, pushing them into further debt.

Economists like to point out that Gen Z are riding the wave of wage increases in some industries. But when TikTok is telling you the world’s ending, it’s easy to miss the wave and focus on the potential wipeout.

It’s Like, Totally A Virtual Mall

TikTok is running with the classic “keeping up with the Joneses” problem, only the Joneses are now thousands of influencers showcasing the latest viral products. And, boom – thanks to the new TikTok Shop, instant gratification is just a swipe away.

  • The Influencer Effect: These are aspirational figures whose lifestyles and product recommendations now feel attainable, and the sheer volume of these influencers have bombard users with “must-have” items.
  • FOMO, meet Instant Gratification: TikTok’s short-form videos make these products feel essential. This fuels FOMO and when combined with the seamless TikTok Shop, it’s dangerously easy to give in to those impulses and spend.
  • TikTok as the Virtual Storefront: This isn’t just a social media platform now, it’s a full-fledged digital shopping mall. Users aren’t passively looking at products, they’re actively targeted based on their viewing history and interests.

Doom and Thrift

All this economic doomscrolling has ironically led some Gen Z’ers down the path of extreme budgeting. It’s a financial plot twist nobody saw coming. Don’t get me wrong, there are some really great reasons to thrift. It seems we’ve become more of a disposable society and this is one way we can recycle those unused or unwanted items, add a little elbow grease, and you’ve got a set of floor lamps that’ll light the way for years to come.

But as far as the economic outlook, Gen Z gets a crash course in fear-driven marketing. Recession warnings clash with flashy ads pushing luxury items amidst “inflation is easing” updates. No wonder they’re conflicted. Forget the “ignorant Gen Z spending” stereotype – where’s the filter for the financial noise?

Focusing on the Need for Balance

TikTok might be the most entertainingly chaotic source of economic news for Gen Z, making their financial journey a confusing dance between panic and aspiration. A little bit of well-timed humor lightens the mood, and this isn’t about automatically defaulting to sources where “it worked for my parents so it should work for me,” but it’s crucial to learn to balance the platform’s extremes with sound financial advice from sources that can provide evidenced based data.

Yes, we are in very different times than just one or two generations ago, but be careful with the dopamine hits. They may get costly.

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