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TikTok Money Tips Could Ruin Your Finances. Here’s How to Spot Bad Advice

Experts say you shouldn't believe everything you hear on #FinTok.

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Doomscrolling on TikTok can lead us down many rabbit holes, from viral dances and niche memes about girlhood to debates on Taylor Swift. And now that social media platforms have become popular ways to learn about money, 76% of Gen Zers scroll through TikTok or YouTube to get financial advice, according to the stock research platform WallStreetZen

Enter personal finance TikTok, also known as #FinTok, where content creators discuss how to get out of credit card debt, whether you should choose a Roth IRA over a traditional IRA, and trends like loud budgeting and soft saving. It sounds like solid money advice. But like with anything you consume online: verify, verify, verify. 

#FinTok has more than 4.5 billion views on TikTok, making it all the more challenging to filter through the noise, according to Lee Decker, social media manager for Quicken. The dark side of TikTok contains misleading financial tips and tricks that could land you in some serious financial or legal trouble.

How to spot bad financial advice on TikTok

The more questionable FinToks have obvious red flags. Non-legit “finfluencers” talk about building wealth overnight, shorting the stock market and how to avoid paying your taxes. 

Most people scrolling through social media for financial advice aren’t on the hunt for a get-rich-quick scheme. They’re likely searching for ways to make smart savings choices and low-risk investments, like getting better returns with a high-yield savings account or certificate of deposit. Except they can easily end up in a sketchy #StockTok rabbit hole. A recent WallStreetZen study found that 63% of stock-related videos on TikTok are misleading. 

Money misinformation is a dangerous game, so we asked our expert review board to provide some helpful tips for spotting it online. Before you trust a random content creator yelling into the void, here are some warning signs to keep in mind.

I see a lot of financial influencers who are teaching things like stock market investing and saying they got rich when, in actuality, they got rich from the course they are selling you on stock market investing, not the investing itself.

1. Anyone can be an ‘expert’ online. Look for creators with credentials 

Anyone can post online pretending to be a money expert without the credentials to back it up. 

Financial content on TikTok rarely includes transparent disclosures to help you determine whether the information is accurate and the source unbiased. (Only 20% of financial advice on social media has any disclosure.) So you probably won’t know whether the finfluencer received commissions or sponsorship to promote a specific product or service, according to the CFA Institute.

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Screenshot by Liliana Hall/CNET

TikTok merely offers a reminder to do your own research when you search keywords like #FinTok, #Money and #PersonalFinance.

“Look into the background and qualifications of TikTok creators providing financial advice to ensure they have expertise in the field,” said Bernadette Joy, a personal finance coach and CNET expert review board member. “I see a lot of financial influencers who are teaching things like stock market investing and saying they got rich when, in actuality, they got rich from the course they are selling you on stock market investing, not the investing itself.”

2. If it sounds too good to be true, move on

Be wary of money advice that promises unrealistic returns. Sustainable financial success usually requires careful planning and time, said Joy. 

If you see creators on TikTok promoting a get-rich-quick plan, red flags should immediately go up, said Alaina Fingal, owner of The Organized Money and another CNET expert review board member. “If it sounds too good to be true, more than likely it probably is going to be too good to be true,” said Fingal.

3. Never rely on a single source

If you’re going to social media apps for money advice, don’t make that your last stop. 

“People increasingly are using alternative forms of media to get their information, so I like to follow the adage: ‘trust but verify,’” said Jannese Torres, money coach and founder of Yo Quiero Dinero

If a money tip or trick catches your attention on TikTok, research it and see what credentialed financial professionals say. Not only does this help you verify whether it’s legit advice, but you’re getting a diverse range of perspectives. 

“It’s important to diversify the information that you get so that you aren’t just looking at a financial influencer for advice, but you’re talking to an actual financial professional,” said Torres. “You have to do more than just following a talking head on social media to be really financially literate.”

4. Don’t fall for scare tactics

Anything with the verbiage “act fast” is a sales pitch, not sound financial advice. 

“Genuine advice is typically based on facts and education. Avoid advice that uses fear tactics to promote a particular financial product or strategy,” said Joy. Statements such as “you’re missing out if you don’t do this” or “only dumb people would pass up this opportunity” create a false sense of urgency, she said.

5. Remember: Money advice is not the same for everyone

Personal finance is, you guessed it, personal. 

A universal approach to saving money disregards how everyone’s financial circumstances are different. For instance, we often hear that six months’ worth of expenses is suitable for an emergency fund. But that doesn’t take into account folks with debt or households living paycheck to paycheck where saving isn’t that easy. 

“Financial advice should be tailored to individual circumstances,” said Joy. “Be cautious of one-size-fits-all recommendations, particularly with investing because investing is highly nuanced based on the individual situation.” 

If TikTok is your space, just don’t let it be your only space.

If you want to improve your financial health, try this instead

A ton of information is readily available thanks to social media, but lousy money advice can end up hurting you financially or land you in legal trouble. 

Learning more about personal finance via TikTok and YouTube is not always a wrong move, but make sure to use your critical thinking skils to verify what’s credible and which sources are reputable. 

“If TikTok is your space, just don’t let it be your only space,” said Fingal. 

To make sure you’re setting yourself up for financial success, consider these steps: 

Improve your financial literacy: Financial literacy equips you with the knowledge to make positive financial decisions. You can improve your money know-how by subscribing to a reputable financial newsletter, listening to different podcasts about money management or talking to an established or licensed financial professional.

 

Set realistic money goals: You won’t become a millionaire overnight, but start by setting realistic goals and writing them down in order of priority. That could mean paying down your debt this year or building an emergency fund in a high-yield savings account. By identifying your financial priorities, you can establish a long-term plan and stick to it.

 

Set boundaries with social media: If social media makes you feel financially inadequate because you’re comparing yourself to someone else, reduce the amount of time you spend scrolling. Set a boundary and log off.

Liliana Hall is an editor for CNET Money covering banking, credit cards and mortgages. Previously, she wrote about personal credit for Bankrate and CreditCards.com. She is passionate about providing accessible content to enhance financial literacy. She graduated from the University of Texas at Austin with a bachelor's degree in journalism, and has worked in the newsrooms of KUT and the Austin Chronicle. When not working, she is probably paddle boarding, hopping on a flight or reading for her book club.
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