Financial lessons learned…from TikTok

You might think of TikTok as an attention-sapping productivity hole, filled with daft pranks, dance crazes, and annoying people saying things you don’t understand. And you’d be right. But…there are certain sections of TikTok where there’s useful information to be found.

Financial TikTok is a section of the app that offers users useful tips on how to manage their money. If you don’t believe us, read on. Below are our top five financial lessons learned from TikTok.

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1. There are fun ways to save money

Everyone aspires to save money, whether it’s to go on holiday to an exotic destination, or just so you have enough put away to finally get the downstairs bathroom retiled. The problem with counting your pennies, though, is that it’s such a slog.

Not on TikTok, and that’s our first lesson. Some of the most popular styles of video on financial TikTok are related to fun ways of saving, like the 100 day challenge.

The premise is simple. You set a date 100 days from now, and buy yourself 100 envelopes. You then number the envelopes from one to one hundred, and shuffle them up so that the order of the numbers is randomised.

Every day you choose an envelope, and whichever envelope you choose, you have to place the corresponding amount of pounds inside it. If you draw number 67, for example, you’ll place £67 inside the envelope. At the end of the 100 days, you should have over £5,000 in savings.

2. It’s never too early to start thinking about retirement

TikTok is full of 20-somethings who have already made enough money to retire twice over. While that thought might make you green with envy (us too), it does point to an important lesson for everyone – it’s never too early to start thinking about retirement.

Generation Z – the generation most likely to be found on TikTok – tend to be aged between 10 and 25, and they’re already thinking about it.

While you can’t turn back the clock, the lesson here is that it’s never too late to start thinking about your twilight years, specifically how you can put enough money away to make sure you can live comfortably.

This could be as simple as putting between 5 and 10% of your wage away each month. Even if you think that doesn’t amount to much in the short term, 12 monthly donations to your retirement fund will look very different after 20 or 30 years.

3. A good credit score is so important

Financial TikTok – or ‘FinTok’, as the kids would call it – can sometimes surprise you. It’s not all silly videos and dance crazes. There are some pretty serious topics that get covered, one of which is the importance of a solid credit score.

Now if you don’t know what a credit score is, or you’re familiar with the concept but you have no idea whether your credit rating is good, bad, or indifferent, then you’re not alone. That’s why it’s so positive that people on TikTok are covering the topic.

The importance of a good credit score isn’t lost on the TikTok generation. These kids have serious financial goals, and they understand that it will be very difficult for them to do something like buy their own home without a solid credit history. So they’re starting early.

As discovered on FinTok, you can actually get started building up a positive payment history while you’re under 18. If you’re named as an authorised user on a parent or guardian’s credit card, you get points in your favour for their positive credit behaviours. That way, once you’re 18 and ready to start your own credit journey, you’ll already be ahead of the game.

4. You don’t have to stick to just one income stream

For the people already working multiple jobs just to make ends meet, this one might seem like a bit of a slap in the face, but on financial TikTok, the side hustle is king.

A side hustle is any activity – outside your main source of income – that has the potential to earn you money. These often stem from hobbies that people would take part in anyway, from selling paintings and other arts and crafts, to doing some freelance writing on the side.

For people of an older generation who have grown used to finishing the traditional 9 to 5 and heading home, this might seem strange – and there’s a lot to be said for spending quality time with the family.

But if you have a hobby you’re passionate about and you could do with some extra cash, look into turning it into a side hustle. You might be surprised by how much money there is to be made.

5. Investing isn’t just for old people who already have money

When you think of stocks, shares, and investments, you’re probably thinking of a bunch of stuffy old men in tweed suits shifting their piles of money from one place to another. That’s understandable – investing doesn’t always seem accessible for the average person.

Well, TikTok is helping to change that. For every TikTokker who seems to spend most of their time throwing around wads of cash without mentioning where it came from, there are others who will detail exactly how they got to where they are, and how you can too.

Many of the kids on TikTok are savvy investors. They place a lot of onus on the idea of ‘passive income’, which is essentially money that makes itself. That thought might get you excited, but it’s important to do thorough research, or even seek professional financial advice, before rushing into any investment.

That said, whether it’s putting sensible amounts of money into traditional stocks and shares, or exploring (much more volatile) avenues like cryptocurrency, passive income is a reality for millions of people. If you do your research and start small, there’s no reason it can’t work for you too.