How Does Financial Advice on TikTok Stack Up? Here's What an Expert Thinks

From "cash stuffing" to "loud budgeting," TikTok has become a center of financial advice and video-friendly personal finance trends for Gen Z.

According to a survey from WallStreetZen, 76% of Gen Zers are using YouTube and TikTok to learn about personal finance. The most popular financial topics for Gen Zers to learn about on TikTok and other social media include budgeting (81% of Gen Zers), passive income (63%) and investing in stocks (59%).

But how much of TikTok's financial advice is actually good? Personal finance is often too complicated to cover in a two-minute video, and not every "FinTok" influencer has professional training, official certifications, or fiduciary responsibilities. Is TikTok personal finance advice good overall, or could it be leading impressionable young investors down the wrong path?

We talked with Chris Rahemtulla, CFP®, ChFC®, CEPA®, and Wealth Senior Financial Planner, VP of Citizens Wealth Management, to see what an expert thinks about TikTok financial advice.

TikTok budgeting ideas are actually pretty good

"Loud budgeting" is one fun TikTok trend that took the personal finance world by storm -- and it's actually a healthy, useful attitude to bring to your monthly spending. This isn't the only budgeting idea to come from TikTok. Chris Rahemtulla says budgeting is one area of advice found on TikTok that many find helpful.

"Budgeting can be one of the most challenging concepts in personal finance, regardless of someone's age, or income," Chris Rahemtulla said. "People can apply many budgeting strategies on TikTok to track their spending, build an emergency fund or save more. For example, one might use a budgeting app or name their bank accounts. Another idea is the 100 Envelope Challenge, which involves saving money in set envelopes ranging from $1 up to $100, with the idea that by the end, you'll eventually save $5,050."

If TikTok trends can help more people get proactive and creative about budgeting, and feel more in control of their spending, that is likely going to have good effects for Gen Z personal finances.

Good TikTok financial advice encourages saving and stability

Want to know the difference between "good" and "bad" financial advice on TikTok? Chris Rahemtulla says that the best TikTok personal finance advice is focused on saving and long-term investing, not get-rich-quick schemes.

"Good personal finance content on TikTok fosters financial stability and encourages growing wealth without exposing people or their families to unnecessary risk," Chris Rahemtulla said. "This kind of content is fact-based and data-driven, using reliable sources such as a trusted, professional financial advisor."

Chris says that TikTok finance trends have come up in financial planning conversations with his clients, which is a good sign that TikTok is motivating people to take some positive steps forward with their personal finances. "For example, #FrugalFebruary was a trending topic on TikTok that encouraged viewers to spend as little as possible to boost their savings," Chris Rehemtulla said. "A client mentioned in a financial planning meeting that they were using Frugal February to save more. We used her interest in the budgeting trend to reset her financial habits and priorities and make sure she was doing the right things to remain on track to reach her financial goals."

That's a good rule of thumb for whether personal finance advice (on social media or in real life) is helpful: Is it helping you feel calmer and better-informed? Is it encouraging you to make small daily changes and long-term plans? Or is it making you anxious with aggressive sales pitches and excessive promises?

The best TikTok personal finance advice really can be good if it helps you achieve financial stability, instead of making risky bets. For example, WallStreetZen did an analysis of TikTok financial advice about buying stocks. The study found that out of all the stock picks and stock-buying advice on TikTok's stock-related hashtags, 63% of TikTok stock advice was misleading.

TikTok financial advice can start larger conversations

Another benefit of TikTok personal finance advice, according to Chris Rahemtulla, is that it helps people start to talk more openly about money. When Gen Z (or people of all ages) can get more curious about finances or learn something new about managing money, even if it comes from a goofy social media trend or a short video, this can spark larger conversations that can help get people on the right track.

"Personal finance is a taboo topic for many and can be very difficult to discuss openly," Chris Rahemtulla said. "However, the #FinTok hashtag on TikTok has helped many people overcome anxieties about money matters and empowered them to take ownership of their financial lives. Many of my younger clients decided to meet with a financial planner because they wanted to explore the savings and investment strategies they first saw on TikTok."

Sometimes getting a baseline level of financial education on TikTok can give people the perspective and confidence that they need to go get further advice and expert help. If a TikTok video helps inspire more Gen Zers to get financial coaching or other professional financial advice, that will be a good thing.

Bottom line

Gen Zers often feel behind on their finances, because they're young and just starting careers. Plus housing costs and auto insurance are more expensive than ever, and high inflation has been discouraging. TikTok personal finance advice can be a useful way for this younger generation to learn about money and start to make better moves as savers and investors. But try to use TikTok as a way to get inspired for budgeting and money-saving tips, not so much for "how to pick stocks."