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If you're getting financial advice from TikTok influencers don't stop there

Erin Confortini, 23, taught herself to budget and invest in college when she realized she didn't know much about personal finance — even as a finance major.

Now, she shares the details of her financial life with hundreds of thousands of people online.

In a recent video posted to TikTok, she tells viewers exactly how much of her twice-monthly $2,773 paycheck goes into taxes, insurance and retirement: $520, $25 and $305, respectively. It's gotten more than one million views.

In the absence of a national requirement for financial literacy in high school, teens and twenty-somethings are seeking out ways to save, budget and invest. And social media, especially TikTok, has become a textbook.

But personal finance experts — including content creators themselves — warn that social media should only be a starting point.

Who do you trust?

You can't believe everything you read on the internet — or scroll past on TikTok. There are sometimes competing messages, and influencers can recommend different things.

Confortini, who works full time as an internal auditor but moonlights as a personal finance content creator, is among dozens of social media influencers who've made their own personal finance journeys into a side hustle, scoring brand deals to promote products by fintech companies and selling downloadable templates of their budget spreadsheets.

"It really comes down to who you build trust with," says Grace Lemire, 24, a content creator from Massachusetts.

Lemire covers topics such as saving, traveling on a budget and the best beginner credit cards. She also talks about how to deal with money conflicts with friends and family.

"There are people who resonate with the content that I post, and they trust me and so they trust my advice," says Lemire, whose TikTok videos have racked up more than two million views. "But there are people who don't resonate with my content and so they don't trust my advice."

Lemire gets paid by brands to advertise products — she made $1,600 from content deals in January and is set to make $6,600 in February — and she says she vets the companies before agreeing to promote their stuff.

"It's a big role to have," she says. "You want to make sure you're doing the right thing because the stakes are so high."

Nearly 80% of Americans between 18 and 41 have gotten financial advice from social media, according to a survey by Forbes Advisor and market research company Prolific. But financial advisors warn there can be pitfalls.

Financial planner Lazetta Rainey Braxton says it's "wonderful" that social media influencers motivate people to get their finances in order, but influencers can't provide in-depth financial advice. There's no replacement for professional, time-earned expertise, she says.

"Most people want to do the least amount of work and get the greatest amount of benefit," says Braxton. "That's why TikTok is so attractive. It's like, what can you tell me in a sound bite that can save me some time and give me exactly what I want."

Plus, while social platforms can introduce people to new terms and ideas on how to save money, it can be dangerous to open new savings and investment accounts without a full understanding of the fine print, says Helen Ngo, a financial planner based in Atlanta.

"TikTokers bring awareness, but the videos don't give them enough [of a] timeframe to explain the context around what is legal and not legal to do," says Ngo.

Ngo says she recommends her clients do three things: open an emergency savings fund account, lay out financial goals for the next one to five years and then consider goals beyond that.

Nothing new under the sun

Sharing financial wins and losses with strangers online isn't new.

In 2010 and 2011, bloggers were creating the same sort of relatable content, putting out their stories about getting out of debt and reaching financial milestones — just as TikTok influencers are doing today. Mandi Woodruff, 35, followed that burgeoning scene back then. She's a career coach who hosts a podcast about wealth building for women of color and is a former personal finance journalist.

"What really launched my career was helping millennials overcome and recover from the Great Recession," says Woodruff.

Now, Woodruff says she's glad to see more people entering the personal finance content space. What she loved about blogging — and what she sees in social media now — was its power to share information.

"It removes a lot of the barriers that have traditionally been in place for young people and especially people of color," says Woodruff.

Typically, people start to learn to save and invest from their parents or close relatives, often leaving people from under-resourced groups behind, Woodruff says. "Our parents typically don't have the resources or knowledge themselves."

A desire to learn

For Anisha Singhal, a senior at Stuyvesant High School in New York City, learning personal finance is a priority. While she found helpful information about student loans and college scholarships on social media, not all of the content she was recommended was directly applicable to her.

"With TikToks, the whole idea is to grab your attention and make you think, like, oh there's some sort of hack here — some little loophole that I can make more money through," she says.

In January 2021, Singhal wrote an article about teens' lack of financial literacy skills in her school paper, which prompted teacher David Peng to launch a personal finance course, offered as a math elective.

And the class is packed — Singhal wasn't able to get off the wait list until this year, the second year it's been offered.

Peng says his students are very engaged during lessons, and plenty of other students have asked to audit the course.

"Personal finance is an extremely hands-on course. You have to experience some of the decision making that adults have to go through," he says.

Peng, who is in his mid-30s and attended Stuyvesant himself, didn't learn personal finance as a student.

While he acknowledges that a lot can be learned online, Peng says it's hard to extract a lot of nuance from short form videos.

Singhal says social media is helpful — but it ranks below her personal finance course and her parents as sources of financial advice.

Information overload

"You need to do your own research. A thousand percent," says career coach Woodruff, who warns that people should never act on financial advice without assessing its benefit to their own financial situation.

Many content creators do advise their viewers to seek other resources. Confortini, for example, frequently encourages her followers to seek information beyond the platform and agrees that social media can feel like "information overload."

"I'm not going to be able, in a three minute TikTok video, be able to tell you everything you need to know about personal finance," she says.

Copyright 2023 NPR. To see more, visit https://www.npr.org.

Corrected: February 27, 2023 at 11:00 PM CST
This story originally said Erin Confortini made $2,773 a month. That is an error. She makes $2,773 twice a month.
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Mary Yang
Mary Yang is an intern on the Business Desk where she covers technology, media, labor and the economy. She comes to NPR from Foreign Policy where she covered the beginning of Russia's war in Ukraine and built a beat on Southeast Asia, Asia and the Pacific Islands.
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