Talking about money isn’t as taboo as it once was, and we can thank social media for that.
Sure, younger generations would rather discuss politics than finances. But millennials and Gen Zers are far less guarded about “money talk” than baby boomers and Gen Xers, according to a survey from Empower.
TikTok has become the launchpad for Gen Z’s money routines and rituals. Since most of us don’t learn about personal finance in school, we turn to social media to share our financial knowledge, tips and trends, from soft saving and loud budgeting to doom spending.
But are these trends just rebranded financial strategies that have been around for generations? OK boomer, let’s see.
Financial advice is cyclical, meaning every generation will probably have some rendition of the previous generation’s money-saving practices, according to Jordan Sowhanger, a certified financial planner and wealth advisor at Girard. And that’s because the tried-and-true strategies have survived the test of time, making these trends seem less deep.
Gen Z’s favorite financial trends
Last December, social media started buzzing about a new financial trend when comedian Lukas Battle introduced “loud budgeting” on TikTok. Though it started as a joke, Gen Z ran with it, and the post has been viewed more than 1.5 million times.
Here are some of the money trends you may have heard of:
Loud budgeting
Loud budgeting is a clever money-saving tactic that urges you to speak up about cutting back on expenses. You’re keeping yourself in check by openly discussing why you’re focusing on your financial well-being. If you’d rather skip a weekend with friends to tackle credit card debt, say that out loud.
@itsabigailhall LOUD BUDGETING and the reasons behind why you overspend. #mentalhealth #therapytok #perspective #fyp #manifestation #money #selfawareness #budget #financialfreedom #financetips ♬ original sound – Abigail Hall
Soft saving
Soft saving rejects the rise-and-grind mentality and encourages us to embrace the present, with less stress on budgeting and saving for the future. The idea is to have a “softer” approach to life by emphasizing your mental and emotional needs alongside your finances.
@thewealthywomanclub #softsavings #softsaving #howtosavemoneytips #savingmoneytipsuk #savingmoneyup ♬ original sound – Mia | MONEY COACH FOR WOMEN
100-envelope challenge
You can make finances fun with a money-saving game. Number envelopes from 1 to 100, and set aside the dollar amount on the envelope every day. So, put $1 in the envelope numbered one and $100 in the envelope numbered 100. After 100 days, you’ll save over $5,000.
@the.milli.way Replying to @guja Trying the savings challenge and doubling it to reach $10,000 in 100 days💵 #saving #savingmoney #100envelopechallenge #savingschallenge #savings #10k #5k ♬ original sound – The Milli Way
Money dysmorphia
Social media has a negative effect on self-esteem, and it can make us feel financially behind, even if we aren’t. Roughly 43% of Gen Z have a distorted view of their finances and insecurity about meeting their money goals.
@jareenimam This economy and social media are giving people money dysmorphia @Jareen Imam #moneytrends2024 #millennialmoney #personalfinancetok #genzmoneytrends #moneyenvy ♬ original sound – Jareen Imam
New generation, old money trends rebranded
Working hard, saving diligently and spending wisely. That’s age-old financial advice that stands the test of time, according to Sowhanger.
While social media brings visibility to seemingly novel savings trends, it’s not that groundbreaking. The idea of stashing cash in envelopes, for example, has been around for decades. And money dysmorphia is today’s version of “keeping up with the Joneses,” a century-old expression about comparing your social class to your neighbor’s.
Financial trends like “soft saving” and “loud budgeting” reflect what’s happening in the economy and society. Many Gen Zers started their financial journeys overshadowed by a turbulent economic environment: a global pandemic, soaring interest rates, record-high inflation and wages that haven’t kept pace. Gen Z also carries 28% of the student loan debt in the US. We embrace a “softer” approach to our finances because it’s objectively practical and realistic -- not per se because it’s cool online.
What someone in their 20s is experiencing today could be said for baby boomers four decades ago. Adults who lived through the 1980s remember having to sacrifice their savings due to higher interest rates and record inflation, according to Bernadette Joy, a personal finance coach and CNET expert review board member.
The vast majority of Joy’s clients, who range from age 20 to 70, have chosen quality of life over saving for the future. That means soft saving isn’t unique to Gen Z.
“New term, same trend, regardless of generation,” said Joy.
The pros and cons of social media financial trends
Though Gen Z’s money trends mirror what other generations experienced, the primary difference is that they’re being talked about openly on social media. Some financial experts say more visibility and accessibility to these topics is a good thing. Personal finance TikTok, also known as #FinTok, has more than 4.7 billion views.
“Money has been a taboo subject for decades, but social media is changing that for the better,” said Stephen Kates, a certified financial planner with Annuity.org.
Social media can also amplify these trends quickly until they die out, making it a double-edged sword. Some experts worry that Gen Z will stop focusing on their finances when the bloom is off the rose.
“Romanticizing otherwise boring topics is both a pro and a con,” said Sowhangar. “If it’s trending now, it’s probably going to stop trending at some point.”
The average shelf-life of a TikTok trend is about 90 days, so a financial craze on TikTok risks being another passing fad. If money-saving concepts stop being the latest thing in 2024, you don’t want to lose the importance of budgeting, said Sowhangar.
Tried-and-true savings strategies
Regardless of what’s popular online, here are a few successful saving strategies that have withstood the test of time:
Create a realistic budget
Look at your expenses and set a realistic savings goal you can keep up with. List all your bills and subtract what you spend each month from your income. This is also a great time to look at what expenses you can cut back on, such as streaming services you don’t use anymore.
“Set small goals and work towards them,” said Kelly Ann Winget, founder and chief executive officer of Alternative Wealth Partners. “Once you achieve those, start to tackle larger goals. Financial freedom means having the money to walk away from situations that no longer serve your well-being or financial interests.”
Build your emergency fund
Unexpected expenses are inevitable, so the best way to prepare is to build an emergency fund. Leaning on high-interest credit cards in an emergency is risky, so try to save several months’ worth of living expenses in an account you can access easily while earning some interest. Right now, some of the best high-yield savings accounts earn annual percentage yields up to 5.35%.
Many experts suggest saving at least six months’ worth of expenses in your emergency fund, but the right figure for you will depend on your individual circumstances.
The main thing you want to avoid is taking on too much high-interest credit card debt during an emergency where you can’t dig yourself out, said Sowhangar.
Automate your savings
Setting up recurring automatic transfers to your savings account streamlines the process and restricts any mental barriers that might stop you from doing it manually.
“One of the best ways to consistently save is to set aside money from your pay before it hits your bank account,” said Kates.”If you need it for an emergency, it’s there, but the automation takes the mental energy out of having to resist spending it or decide how to save it.”
Set it on autopilot and let compound interest work its magic.
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