Financial TikTok videos have become very popular, especially among young people. Even though some of these videos have gone viral, they might not be the best and shouldn’t be the only source of information for sound financial decisions.
MSUFCU Chief Marketing Officer Deidre Davis discusses why financial TikTok isn't the best source for financial advice, and where people can find more reliable financial resources.
What is the appeal of financial videos on TikTok?
TikTok’s ability to take a user’s video and disseminate it to millions of people in a matter of hours or days is remarkable. It’s convenient to use, and anyone with a smartphone or tablet can create and post content. It attracts younger people looking for entertainment. Videos on TikTok are usually 60 seconds or less, which is perfect for the shorter attention span of its typically younger users.
What’s the problem?
While TikTok has a lot of content, not all of it is beneficial or accurate, and claims are often unverified. At times, TikTok can even spread financial myths, scams, and misleading information.
What viewers end up seeing isn’t always good financial advice from trusted sources – it can be one random person’s experience.
Personal financial advice is individual, not one-size-fits-all. The best financial advice for your situation can’t be realistically covered in a 60-second video.
How can you protect yourself from making a bad investment choice?
Do your own research before making any financial decision. Use financial education resources from reputable online sources and your own financial institution. For example, MSUFCU offers these tips to avoid falling prey to investment schemes:
1. Steer clear of pyramid schemes
This is an investment that requires you to recruit new investors in order to realize a return. It is illegal, according to the Federal Trade Commission.
2. Be cautious if you don’t understand how an investment product generates its returns
3. If you feel pressured to invest quickly, you probably should not do so.
This is a trick used to limit the time you have to research before making a decision.
4. Only consider financial service providers that have good reviews
Most scams promise great returns, often without solid track records to back them up.
5. Trust your instincts
If the opportunity seems too good to be true, it probably is.
Before making an investment, you should understand core financial concepts, such as your financial status, budgeting, credit, and more.
What can MSUFCU do to help?
The Credit Union provides free financial education for all community members. We believe empowering individuals to make informed decisions about their well-being, including their finances, makes for a stronger community. We host in-person financial education presentations, webinars, and a financial podcast, Wallet Watch.
Learn more about banking and money-saving opportunities at msufcu.org.