The kids are getting “lighted up” – financially illuminatederate, that is.
Self-styled financial influencers are giving Gen Zers some much-needed advice, touting a one-month “financial cleanse” as the ultimate way to cut spending in 2023.
Seema Sheth, who coined the “30-day financial cleanse,” boasts of her method as a way to cut unnecessary costs and ensure more money in your pockets this year.
“Maybe you spent more than you wanted to, inflation is high, life feels crazy,” Sheth begins a recent viral clip. This isn’t a “get-rich-quick scheme,” she insisted, promising to give viewers “actionable” steps every day that will make their “financial life a little bit better.”
With student debt mounting and more young people fleeing their jobs as the “Great Resignation” epidemic continues, these crash courses delivered via TikTok may be the best way to reach the masses online.
“Until financial education is offered in schools, institutions of higher education and workplaces, we will continue to see generations of adults struggling with their personal finances,” said George Washington University professor Annamaria Lusardi, who founded the Literacy Center of Excellence GWU Global Finance. GFLEC research confirmed that our younger adults are ill-equipped to manage their bank accounts.
Don’t worry though, the TikTok experts are here. The platform is full of money-savvy creators who can help viewers get the most out of their moolah without all the fuss. And to ease the anxiety Gen Zers feel about their finances, they boil it down to the basics, taking it one step at a time.
And that is good. According to a Credit Karma survey, nearly half of Gen Z respondents said they relied on social media for financial advice, the most of any generation, while a quarter of them said they learned more about money from creators of content than from school or books.
“I’m introducing you to the basics of financial literacy,” Sheth declared in his Dec. 30 video, promising that his 30-day challenge will “revolutionize” viewers’ relationship with money.
For the first day of financial resolutions, she demonstrates how to keep track of monthly subscriptions, breaking them down by type, cost per month, and annual price. But here comes the tricky part: participants have to decide which ones are worth their hard-earned money and immediately cancel the ones that aren’t.
The next strategy is called “budgeting for free”. In other words, people’s expenses are divided into three categories: fixed, variable and savings. Then there’s discretionary spending, and it can be the hardest to tame, according to Sheth.
So far, amid Sheth’s month-long cleanup, viewers seem grateful for the tough but fair approach to finances.
“I really like this series, even though it hurts,” wrote one TikTok user. Another agreed: “I feel so called.”
The TikTok page for You Need A Budget, also known as the YNAB method by its followers, is also known for creating budget-friendly dialogues online. The account just launched a similar “30-Day Money Challenge,” focused on creating a positive and informed relationship with money.
From setting intentions and goals to self-imposed spending limits, YNAB aims to empower people with the simple knowledge they need to take control of their financial habits and, in turn, their future. In the comments section, viewers list their own goals for the year, calling for “bring it” the day after the challenge.
Instead of viral side hustles, gaining financial literacy, even from TikTok, could build confidence and wealth over time.
“It’s about learning a new way to live in harmony with your finances,” Sheth said of her challenge.
“If you don’t get it right, if you don’t manage it properly, it could really ruin your life.”