Social media and personal finance

Apps can help or harm personal funds

From consumer spending habits to political campaign ads, social media plays a major role in how people lead their lives and what information influences them. Apps like TikTok and Instagram have become search engines for information and their influence expands into
every niche, including personal finance.

Finance Gurus like Vivian Tu, @ yourrichbff on TikTok, and Delyanne Barros, @DelyanneTheMoneyCoach, have amassed millions of followers.

Kristen Blevins, AP Macroeconomics and Microeconomics teacher, said there is a lot of investing and personal finance advice on TikTok. But while information may be abundant, it is not always reliable.

“The concern I have is vetting who gives out this information and whether or not it is accurate,” Blevins said.

While there are a few investment companies just starting to get into the social media game, most advice comes from individuals who also make a profit when they advertise specific products or services. There are some companies, however, that make a profit by helping others invest and pursue personal finance goals.

“Social media has really created a lot of opportunities for people to start investing at a young age.”

— - Jose Sinwell, President of Investment Club

“Reputable companies like Charles Schwab have a lot of resources for people looking to get into personal finance,” Blevins said.

Another company, which works specifically to help women invest and learn about finances, is Ellevest.

Ellevest is a financial service “built for women, by women.” The company offers a subscription package which includes a personal investment plan. It has grown through the use of social media with 350,000 Instagram followers.

“Social media has really created a lot of opportunities for people to start investing at a young age,” said Josie Sinwell, president of  Hockaday’s Investment Club. The pressure to invest on social media has led to a significant rise in Gen Z participating in the stock market.

“I think with that whole GameStop situation last year, we saw how younger people are affecting the market since that was all mostly through Reddit and Instagram,” Sinwell said.

In January of 2021, a group of investors on Reddit coordinated to raise the stock value of struggling companies such as GameStop, AMC, and Macy’s. Many hedge funds and short sellers had placed bets that these stocks would crash, so their unexpected rise led to thousands of dollars of losses. The redditors were mainly Gen Z and millennials who invested using apps like Robinhood.

The ease of social media has also led to the rise in people who identify themselves as personal finance gurus, and through social media, there is the added bonus of interacting with others who have similar questions and being part of an online community.

“Teenagers know how to use these platforms and the format is appealing to them,” Sinwell said. “It’s just easier for them to understand than reading documents with a bunch of vague language they don’t understand. It’s nice to have a comment section where you can ask questions and others can respond to you.”