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Financial Advice on TikTok: What You Need to Know
Discussing personal finance on social media is not a new phenomenon, but financial advice on TikTok is spreading rapidly. As you scroll through the app, you’ll encounter a variety of personal finance content, from everyday budgeting tips to aspirational “what I spend in a day” videos.
While many people use TikTok to share valuable financial guidance, following some advice on the platform can be risky. Here are some ways to determine whether a TikTok influencer is providing sound advice or leading you astray.
1. Google It
When someone recommends a financial strategy, it’s likely you’ll find information about it elsewhere online. If a TikToker claims a financial tip is a little-known secret, it might be for a reason—perhaps it’s impractical or even illegal.
For instance, registering a business doesn’t allow you to write off personal bills as business expenses, and doing so could have tax consequences. Yet, some TikTokers suggest this for tax breaks. Similarly, investing in a brokerage account and selling assets without paying taxes on gains is another big no-no, but some TikTokers provide tips on how to do it.
When in doubt, Google it. Here are some reliable resources for information on tax rules, financial products, and more:
- IRS.gov: Find information on tax forms, tax rules, and how to pay your tax bill.
- ConsumerFinance.gov: Access a database of consumer financial information, including mortgage programs and student loan repayment options.
- Investor.gov: Learn about investing basics and different investment products.
- FTC.gov: Explore guides on debt vehicles and how to avoid and report scams.
2. Check Credentials
While credentials aren’t required to offer general tips on saving money or buying a home, advice on complex topics like stock picks should be backed by experience. Experts in fields such as real estate, tax planning, and investing should display their credentials in their bio.
Check profiles and search names to identify real experts. Financial experts include certified financial planners, chartered financial analysts, certified public accountants, and enrolled agents.
3. Look Out for Get-Rich-Quick Advice
Be wary of anyone promising to help you amass thousands or millions of dollars overnight in a short video. Strategies like day trading can put you at risk of losing significant sums of money.
Instead, focus on creating a budget, building emergency savings, paying down debt, and investing in retirement plans. If you want to ensure you’re on the right financial track, consider speaking with a financial planner—one you find off TikTok.
4. Figure Out the Motive
Using social media to discuss money isn’t always bad—many legitimate public figures and advisors use it to teach financial literacy. However, some may be jumping on a trend for a payday. Determine their motive, which could be selling a product or gaining followers by sharing financial hot takes.
5. Beware of Guarantees
When it comes to money, few things are guaranteed. For example, past investment performance doesn’t guarantee future performance. Similarly, buying and flipping real estate isn’t guaranteed to be profitable.
If a TikToker guarantees a strategy will work, proceed with caution. Many variables must align for a financial move to be successful, and conducting your own research can help you decide if it makes sense for you.
The Bottom Line
While giving out financial advice on TikTok is trendy, not all advice is good advice. It’s crucial to vet the information by cross-checking recommendations, reviewing credentials, or consulting with a financial advisor.
For reliable mortgage services, contact O1ne Mortgage at 213-732-3074. We’re here to help you navigate your financial journey with expert advice and personalized service.
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