Tiktok, Gen Z's financial adviser, can be "risky to rely on," experts say

On a given day, Andrea Fernandez will go through her TikTok feed, which usually consists of cute animal videos and fashion flips sprinkled with a bit of MoneyTok — videos that share financial tips and information. Fernandez veers more toward female-focused content: a pair of women giving advice on financial literacy and general investing basics to young women, for example.

"Financial literacy has been a man-centric world, and I've been learning from [these women] what to do with your money when you're in your 20s," said Fernandez, 25, a graduate student in advertising at the University of Texas at Austin. "That's how I learned that I needed a 401(k)." 

Fernandez's parents were not born in the U.S., and she felt they couldn't help her navigate certain aspects of the financial system. So she relies on TikTok to learn everything from investing to how to make the most of a high-yield savings account. 

To no one's surprise, a recent report from dcdx, a Gen Z research and strategy firm, finds that Gen Zers spend a significant amount of time on their phones: 112 complete days and a daily average of seven hours and 22 minutes. TikTok remains the leading app used by Gen Zers, followed by Instagram and Messages. 

According to a survey from the stock research platform WallStreetZen, 76% of Gen Zers pore through YouTube and TikTok for financial tips and tricks. Additionally, the hashtag #Fintok has more than 4.7 billion views on TikTok. 

Younger consumers are scrolling for ideas on budgeting, passive income streams and investing in the stock market. Trends such as underconsumption core, loud budgeting, soft saving and the dupe economy are helping Gen Z embrace their frugal, minimalist side and be vocal and proud of their judicious spending habits. 

There's a lot that could be fueling the trend. For one, more adults are turning to TikTok for their regular news. From 2020 to 2024, this percentage has grown fourfold, from 3% to 17%. When it comes to young adults, per Pew, 40% of those ages 18 to 29 lean on TikTok for news. 

"On the positive side, people are actually learning about finances," said Karen North, a University of Southern California communications professor specializing in digital social media and psychology. "It can take people who aren't interested in finances, and they can curate an experience that will entice them into learning more about finance." 

A sea of misinformation 

But while FinTok and MoneyTok content has exploded in recent years, there are scads of videos giving inaccurate or misleading financial advice. 

According to data from Edelman Research, more than a quarter (26%) of social media users –and 42% in their 30s – said they've fallen for financial misinformation on social media. Two in 10 (19%) have fallen for this type of content several times. 

More alarming, according to an analysis by the cryptocurrency trading platform Paxful, among "influencer investor" videos, more than half 52% of finfluencer (financial influencer) accounts had at least one misleading video. These accounts have 9.46 million followers combined. 

"Users are confusing the size of the audience or following with the amount of expertise that the person has," North said. "So they think that somebody is an expert because the person has a lot of followers, when in fact, one's level of expertise is not correlated with their following." 

"TikTok can be a fun place for Gen Z to start learning about money, but it's risky to rely on it for real financial advice," said Anna Sergunina, a certified financial planner and president and CEO of the Los Gatos, Calif.-based Main Street Financial Planning. "The quick, trendy content often lacks depth, and creators might not have the expertise needed for solid guidance." 

Separating the good from the bad  

How does one separate the good from the bad in the sea of financial information? 

"There's a lot of incorrect information passed off as education or even advice and can have unexpected consequences if acted upon," said Chris Mankoff, a certified financial planner at the Plano, Texas-based firm JTL Wealth Partners.  "Anyone can act like an expert or have a "loophole" to personal finance, especially when it comes to taxes, to gain followers, and it's simply not true." 

Generally speaking, here's what's considered misleading or flawed advice:

Infinite money glitches. These are money hacks that will supposedly net you money forever. For example, the recent Chase Bank ATM money glitch said you could deposit a fake check and withdraw a significant portion of the funds right away. 

Too good to be true money-making ventures. These tout folks who have done amazing things, like make millions from real estate in a short period or get out of debt overnight. There are no shortcuts to growing your money, building credit or getting out of debt. 

Specific real estate or investing tips. These are recommendations on specific stocks to invest in or real estate strategies. These major money moves involve risk, fees and money upfront. Plus, what you invest in depends largely on your unique set of circumstances. 

Recommendations for loans for those with bad credit. Influencers are actively promoting specific loan products. This type of content pushes products with high interest rates and fees without regard for one's specific situation.

Here's what is typically considered good or safe advice on TikTok: 

Budgeting tips. Ideas on budgeting methods such as envelope stuffing and how to save when you're broke are simple and rooted in reality. Plus, these financial wellness tactics require discipline and planning.  

Frugal hacks and deal alerts. While this type of content could spur impulse buys, it can help younger folks clog in on deep discounts and major sales.

Promotion of frugality trends and money conversations. One trend is loud budgeting — being vocal about why you're saving money. Another is going minimalist by way of underconsumption core, and thoughts on the "dupe economy" — affordable alternatives and knock-offs of popular brands. These trends help people embrace frugality and normalize conversations about money that can help others be more well-informed and transparent about their situations. 

How-to-use money apps. These are generally simple instructional videos on how to use popular and emerging budgeting apps and fintech tools. 

Side hustle ideas. These are lists or round-ups of realistic side hustle ideas, but the key word here is "realistic." Reels like these can inspire you to earn extra cash on the side. 

Instead of turning to TikTok as an "end all, be all" of news,  Gen Z should use the platform as a jumping-off point, Sergunina said. "They can turn to reliable sources like books, podcasts, personal finance courses or working with certified financial planners to really build their financial knowledge." 

Fernandez has developed a discerning eye on what's legit or not legit advice on TikTok. She'll only watch FinTok reels on the topics on which she already has a little bit of knowledge. For example, when setting up a 401(k), Fernandez asked her friends if they felt it was legit. Further, she had previously talked to a certified financial counselor at her university. "I won't do anything without having already thought of it a little bit," she said.

Plus, Fernandez will look through a finfluencer's entire channel to see how trustworthy they are. "I'll ask questions like, 'Are they on other platforms? What types of people like their videos?'" she said. "What other videos do they have? Do they have a mission statement? A website?" Fernandez will also look them up to see where they went to college and what degrees they hold.  

Striking a balance 

While there is quite a bit of misleading information on TikTok, there is also a good amount of helpful content. The key is taking the time to figure out what is solid information and what is iffy. 

"The great gift of TikTok on the financial side is exposing people to all of the opportunities and risks out there in the world of finance," North said. "But it's not really a good way to decide exactly what to do with your money." 

"That's because each piece of advice is as good as the person providing the advice," North added. "You have to be careful that the information you're following, seeking and consuming is valid and strategically useful or strategically valuable for you."