When I graduated in 2020, the only required course was one semester of economics, which was cut short due to the onset of the COVID-19 pandemic. The subjects covered included inflation, deflation, and the difference between credit unions and banks, but there was little about personal finance.
Only 22.7% of 2022’s graduating class high school students completed a personal finance course during high school, according to Next Gen Personal Finance, and that’s a substantial improvement over even just four years ago. This means the overwhelming majority of my generation will head off to college or the workforce without formal education on how to handle their money.
As digital natives who have never known life without the Internet, members of Generation Z, or “Zoomers,” possess a certain social media fluency; they are extremely adept in seeking out information online. Questions such as “Where is the nearest ATM?” are easily answered with just a few taps on their phones. However, as digital devices have gotten smarter and algorithms become more perceptive, smartphones and tablets can increasingly predict what information we need.
An example of this is TikTok, the popular video content-creation app that has been downloaded over 2 billion times throughout the world. Despite its original purpose of social sharing and entertainment, is now also a source of financial information for many Zoomers.
The first thing users see when opening the app is the “For You” page, sometimes known as the FYP, a feed of unlimited video content curated by an algorithm. This algorithm takes information from user interactions (such as likes, comments, and shares), video information (hashtags, sounds used, and captions), and account settings (language preferences and country settings) to recommend videos for the user’s feed. If a young user interacts with videos about work, college, or rent, for example, the algorithm is more likely to promote videos on their feed that cover related topics, such as budgeting and investing.
For example, as I enter the second half of my college career, I spend a lot of time imagining my life as a financially independent, graduated and employed adult. My FYP reflects that, as I interact with videos titled, “What I spend in a day as a 25-year-old living in Boston'' or “How I saved enough money to retire at 27.”
As a result, my FYP has become inundated with TikTok financial advisors – from self-proclaimed “financial feminists,” to 30-year-old retired Silicon Valley tech employees, to certified accountants – all providing a different view of financial education.
TikTok also allows users to search for specific content. Similar videos are grouped under certain topics to help users navigate content more easily. For instance, the “Finance” section on the app’s “Discover” page has nearly 17 billion views. The top video in this section (with over 7 million views) is titled “Things rich people won’t tell you,” and is a 25-second video of a woman standing in her office offering six vague pieces of advice, such as “You won’t get rich on salary alone,” “Buy assets, not liabilities,” and “Compounding interest is the ultimate key.”
That post and others like it are merely clickbait. They’re intriguing to viewers but don’t offer much insight, frequently resulting in users visiting the creator's profile or website to learn more. The video offers some advice but is primarily a tool to promote the creator’s personal brand.
Yet, TikTok also has countless videos of people helpfully explaining complex personal finance concepts, such as how to pay off credit card bills, and there are creators who are genuinely eager to share their personal experience and expertise to educate viewers. For example, one video in the Finance section explains how people from different socioeconomic backgrounds use credit cards for different things, such as rewards or basic spending. It has over 400,000 likes and more than 2,000 comments.
Credit unions and other businesses could seize an opportunity to better reach Zoomers by utilizing TikTok. Not only does the FYP algorithm help videos go viral, but it can help creators reach an audience that was not necessarily seeking them out. Businesses do not pay to get their content on someone's feed (although they can) and therefore people are introduced to numerous new companies and influencers mere minutes after opening the app.
Zoomers use TikTok as a source of financial information. Credit unions can take this opportunity to not only reach a new generation of members, but to inform them – to make them smarter savers, spenders, borrowers, and investors.