Many Gen Zers like to use social media outlets such as TikTok, so it makes sense they would turn to the platform for financial advice.
You might find some good advice on financial TikTok, but there’s also plenty of misinformation going around. In fact, per a report from Edelman Financial Engines, 27% of social media users admit to falling for financial advice or information on social media that turned out to be incorrect or misleading.
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Here are some key signs that the advice you find on TikTok might be useless.
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When looking for a traditional financial advisor, you may check their websites, reviews and credentials. This can help you vet these professionals and find one who has a trusted background and might work for you.
When it comes to TikTok, pretty much anyone can hop on the platform and start sharing financial advice. While traditional financial advisors usually have credentials so you can feel better about their advice, that’s generally not the case with online influencers.
Instead, it’s up to you to do your research and vet these users yourself — which can be difficult if they don’t have an online presence outside of social media. But you can do online searches to see their backgrounds, credentials and areas of expertise.
If you’re unable to vet the source, it may be best to steer clear of their advice.
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You may have seen some financial advice on TikTok and thought it sounded too good to be true. If so, that may be a good sign you need to dig deeper into the credibility of the user posting it.
According to CNET, asking whether the advice sounds too good to be true is the easiest way to recognize bad money advice on TikTok.
You may not be looking for schemes to get rich quick when you’re on TikTok wanting financial advice, but sometimes you end up with those kinds of videos. That’s another reason it’s good to be skeptical when you come upon financial advice on TikTok.
In general, money advice needs to be tailored to your specific situation. While advice such as creating a budget or setting goals can apply to most people, other tips really need to be tailored to your financial situation.
For example, the common advice about having six months’ worth of expenses for an emergency fund is good. But that tip doesn’t necessarily take into account people who already live paycheck to paycheck or have massive amounts of debt.
One area in which you may want to be especially careful is investing. The advice you see on TikTok may be very general in nature. If it’s specific, it still may not take into account unique aspects of your financial situation. You may see a TikTok video about good methods for investing. When you dig deeper and compare it with your financial situation, you may see that advice puts you at a higher risk for loss than you would like.
Next time you see what looks like good financial advice on TikTok, you might think about doing an online search to see who’s giving it and how it might apply to your finances.
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This article originally appeared on GOBankingRates.com: TikTok Is Gen Z’s Financial Advisor — 3 Key Signs That Money Advice Is Useless
