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TikTok Influences Many Gen Zers' Views on Money

S.J. Steinhardt
Published Date:
May 9, 2024

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Content on TikTok is shaping young adults’ views in many ways, including how they think about money and finance, The Wall Street Journal reported.

More than half of all U.S. adults ages 18 to 34 use TikTok, according to Pew Research Center. About a third of those 29 and under say they regularly get news on TikTok, up from less than 10 percent in 2020. As a result, many of them base their financial choices on what they see there. (The app is now facing a potential ban in the United States, the Journal reported in April, due to a recently enacted law that will force either a sale by its Chinese owner or a ban.)

Caitlyn Sprinkle, a 27-year-old financial analyst at an asset-management firm in Nashville, Tenn., uses a budgeting app and has been cooking at home lately to save money so that she can buy items such as Lululemon leggings. “Between TikTok and having your friends around you, you’re pressured to buy the things because you want to fit in,” she told the Journal. “That’s always been the case, but with TikTok it’s more prominent.”

TikTok is creating a disconnect between how well off young adults actually are and how they think they’re doing, said economists and 20-somethings interviewed by the Journal. Financial advisers’ term to describe young adults’ distorted view of their financial well-being is “money dysmorphia.”

Evelyn Hidalgo is a 29-year-old full-time content creator who was laid off from a social-strategist job about a year ago. While she posts about being a mom on a budget, her TikTok feed often shows the trendy items that she wishes she had, such as a large, beautiful home. “It doesn’t feel like the norm is your normal,” she told the Journal.

Feeling financially uncertain can lead to poor choices, such as credit-card debt that eats into retirement funds and necessities such as food and housing, said Jacob Channel, a senior economist at LendingTree, an online lending marketplace, in an interview with the Journal.

Despite homeownership feeling out of reach, young adults are reaping the benefits from the current economic climate, said Monique Morrissey, senior economist at the Economic Policy Institute, a nonprofit economic-research and policy organization, in an interview.

“Gen Z and younger millennials are experiencing tailwinds and may not realize that they’re benefiting from a tight labor market that has led to an unusually rapid increase in real wages for younger and lower-wage workers,” she said.

Ninety-one percent of Gen Zers say they have purchased something they saw on social media, according to a survey from Citizens Pay, a buy-now-pay-later service from Citizens. One is BreAunna Rodriguez, a 23-year-old mother of two in Houston. She likes to buy TikTok-popular baby clothes and other small items for herself, including eyelash extensions, coconut-oil mouthwash, and a pumice stone that influencers said reduces stretch marks. 

“It’s hard not to buy things if they say it’s good for me,” she told the Journal.

Last year, TikTok created its own e-commerce engine, TikTok Shop, to compete with online retailers. Many find it hard to resist; about six months ago, Sprinkle bought a Stanley tumbler. “I held out as long as I could,” she said, adding that she had bought several other water bottles that were trending on TikTok.

Sprinkle shares an apartment with a roommate. She told the Journal that she’d love to own a house one day, but it feels like a distant dream. “You have to have a level of happiness, and being able to do the things you want and buy the things you want is part of it,” she said. “Do I save all of my money for the future? No. I try to live more in the moment.”

On the other hand, TikTok has influenced some young adults to become more thrifty. After seeing repeated negative posts about the economy, some experience “doomerism”—an overwhelming feeling of despair. 

“I’m not going to spend my last dollar to keep up with the Joneses,” said Tanayah Thomas, a 23-year-old clothing designer and licensed financial adviser in Staten Island, N.Y, in an interview with the Journal.  “We have to prepare for what’s to come.”