- Missed revenue opportunities may result from this decreased productivity.
- On spending, one of the sneakiest ways TikTok can affect money is by promoting reckless spending among Gen Z.
Image: MARGARET WANJIRU
Unquestionably, social media, particularly TikTok, has won over Generation Z's hearts and minds.
This age group has been more and more interested in the platform because of its captivating short-form video format.
However, there may be a risk to the financial security of young people lurking beneath the surface of limitless amusement.
Though some may consider Gen Z to be technologically adept, they are among the most susceptible to believing false or deceptive financial advice they come across online.
The emergence of the "financial influencer" or "influencer" is the reason behind this.
In a survey done by Enwealth Financial Services last year, 51 per cent of participants — most of whom were in the 18–45 age range — said they felt very comfortable finding pertinent financial information online.
Yet, creators often fail to disclose things like the influencer's occupation or whether they received payment for endorsing a certain product. Without these disclosures, Gen Z can often act on inaccurate investment advice.
On spending, one of the sneakiest ways TikTok can affect money is by promoting reckless spending among Gen Z.
The platform is full of influencers showing off their opulent lifestyles, which distorts young people's ideas of success and money.
Despite their limited income, young adults may feel compelled to imitate these lives, which frequently leads to needless purchases that cause them to rapidly accumulate debt.
The growth of social commerce on TikTok is another cause for concern. Convenience aside, it might sometimes result in impulsive purchases. Product recommendations are thrown at users incessantly, frequently via influencer or paid content endorsements.
This has the potential to encourage a consumerist culture where buying becomes synonymous with happiness.
Even worse, consumerism has been glorified on social media, particularly by Gen Z and Millennials. Concepts like ‘girl math’ and ‘Buy everything, own nothing’ are considered cool and trendy.
Besides spending, the platform's algorithm is developed to maintain user engagement.
This may result in hours of scrolling, possibly at the expense of studies or job obligations. Missed revenue opportunities may result from this decreased productivity.
Another concern is the rise of social commerce on TikTok. While it offers convenience, it can also lead to impulse buying.
Users are bombarded with product recommendations, often through sponsored content or influencer endorsements. This can create a culture of consumerism,
Moreover, the platform’s algorithm is designed to keep users engaged. This can lead to hours spent scrolling, potentially neglecting studies or work responsibilities.
This lost productivity can translate to missed earning opportunities.
Beyond the present, TikTok can indirectly impact finances by influencing career choices.
While the platform has created opportunities for some, it has also led to a surge in young people aspiring to become influencers or content creators.
While these careers can be lucrative, they are also highly competitive and uncertain. A focus solely on social media stardom can divert attention from traditional education and career paths, potentially limiting future earning potential.
To mitigate these risks, Gen Z individuals need to develop strong financial literacy skills.
Understanding budgeting, saving, and investing is crucial. Additionally, setting limits on social media usage and being mindful of online advertising can help prevent impulsive spending.
Parents and educators also have a role to play in teaching young people about financial responsibility and the potential pitfalls of social media.
By cultivating a healthy relationship with both social media and money, Gen Z can navigate the digital age while protecting their financial future.
TikTok is a tool, and like any tool, it can be used for good or bad. By being aware of its potential negative impacts and taking proactive steps, young people can reap the platform's benefits while safeguarding their financial well-being.
Mzenge is the manager, Enwealth Capital Limited.