## Younger Adults Turn to Social Media for Personal Finance Advice

Younger adults in the United States are increasingly using social media platforms for guidance on managing their money. They seek and share information on a wide range of personal finance topics, and sometimes simply commiserate about the financial challenges faced by Gen-Zers and millennials. Platforms such as TikTok have gained popularity among this demographic, with videos from content creators focusing on money-saving strategies, like “loud budgeting,” “frugal February,” and the “100 envelope challenge,” receiving millions of views. This contradicts the belief held by older generations that younger Americans are not paying enough attention to financial matters.

The content on these platforms takes a different approach from traditional personal finance coverage in mainstream media outlets. The tone is conversational, irreverent, and even sassy. It aligns with the lo-fi confessional style embraced by many young people on social media, which emphasizes authenticity and vulnerability.

A recent survey by Forbes Advisor found that approximately 80% of millennials and Gen-Zers turn to social media platforms, including TikTok, Instagram, Reddit, and YouTube, for financial advice. In contrast, only 35% sought guidance from family members, and a mere 11% consulted a financial adviser.

This trend has prompted numerous certified financial planners and other financial experts to join social media platforms and share their own content. However, alongside these experts, many content creators promote “get rich quick” schemes and offer largely useless and dubious money advice.

Ben McLaughlin, president and chief marketing officer of savings platform Raisin, commented on the trend, stating, “A lot of these trends are gimmicky, creative ways to get people to save, but they are not all sound. So it depends on the trend, but overall they are getting people to start thinking about saving, which is a good thing.”

The most popular personal finance tips circulating on TikTok include “loud budgeting,” “frugal February,” and the “100 envelope challenge.” While these trends have garnered significant attention, experts hold varying opinions about their effectiveness.

“Loud budgeting,” popularized by TikTok creator Lukas Battle, emphasizes the financial principle of frugality and publicly committing to staying within a self-prescribed budget. However, declining social invitations solely based on cost may not be the most effective way to learn budgeting skills, according to some experts. Economist Michael Szanto expressed concern that this approach may come across as negative and cheap, while personal finance educator Ben Markley sees value in being explicit about financial priorities and having open conversations about money.

“Frugal February” is another TikTok trend that encourages belt-tightening at the beginning of the year. Some creators participate in “no buy” challenges, while others opt for cooking at home instead of dining out. This trend received approval from McLaughlin, who believes it prompts individuals to examine their expenses and reset their financial habits. However, Szanto warned against practicing frugality for only one month, emphasizing the importance of adopting a frugal mindset year-round.

The “100 envelope” challenge involves depositing varying amounts of money into envelopes each day for 100 days, starting with $1 and culminating in a $100 deposit. While this approach can be an effective saving method, it has limitations. Cash-stuffed envelopes do not earn interest, and as more retailers move away from accepting cash, it may become impractical. Experts like Szanto question the practicality of carrying large amounts of cash. Markley suggested setting explicit financial goals, such as saving for specific expenses, rather than simply saving in envelopes. McLaughlin emphasized the benefits of savings accounts for investing, as they offer accessibility and higher interest rates.

In summary, younger adults are increasingly turning to social media, particularly platforms like TikTok, for personal finance advice. While the content creators on these platforms offer both helpful and dubious advice, they are successful in initiating conversations about saving money. Popular trends like “loud budgeting,” “frugal February,” and the “100 envelope challenge” have gained widespread attention, but experts have differing opinions on their long-term effectiveness.