TikTok Trends Can Affect Your Finances.
Oluwatosin Olaseinde
Founder, MoneyAfrica & Ladda | Fintech | Edtech | World Economic Forum Young Global Leader | Linked In Top Voices Finance & Economy 2020 | Mandela Washington Fellowship | Financial literacy expert
Good morning and how are you doing?
Friday letters are usually dedicated to taking questions from our community. Do you have a question for us? Please feel free to?
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Question?
I’ve been thinking about how the TikTok app is really booming and lots of people use it for basically everything and anything.?
How do these TikTok trends cause overconsumption and how does it impact our finances?
Answer
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TikTok app has reached over 1.2 billion users, most users being part of the younger generation. Millennials and Gen Zers alike have been heavily influenced by the culture of this app, especially towards trends.
TikTok is known for its viral trends, which can lead to overconsumption, especially when it comes to purchasing items that are not necessary. Creators often promote products, fashion items and gadgets, which can create a sense of urgency to buy. Additionally, the app's algorithm shows users more of what they engage with, creating a cycle of consumption.
Overconsumption can have a significant impact on finances, leading to debt, financial stress, and poor financial health. The constant need to buy the latest product or trend can cause impulse buying, which can quickly add up and become a financial burden.
TikTok may be a guide to what is popular, but you should take a step back before ordering that new water wig or new top and think about whether they really need it. By giving in to this cycle, we are contributing to unsustainable shopping habits. At the end of the day, we all want to fit in, but our first priority should be combatting our overconsumption.
In summary, TikTok trends can cause overconsumption, especially in buying items that are not necessary. Practice wise financial decisions, such as creating a budget, identifying needs and wants, researching products, thinking long-term, and delayed gratification, and you will be able to avoid overspending and ensure your financial health remains intact.
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Question?
This is the year I need to be more intentional with investing the way I have done with savings. I listened to one of the sessions about ETFs but I don't even know where to start from. What should I look out for?
What should I know? I'm looking to do this every month for as long as possible.
Answer
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An ETF is a type of investment fund that holds a basket of securities such as stocks, bonds, or commodities. When you buy shares of an ETF, you're buying a small piece of the entire basket of securities.
Before investing in ETFs, identify your investment goals and risk tolerance. Take note of factors such as your time horizon, financial goals, and your willingness to take on risk.
There are many different types of ETFs available, each with its own investment strategy and risk profile.?
Do your research and find ETFs that align with your investment goals and risk tolerance.
Look for ETFs with a low expense ratio because high fees can eat into your returns over time. The expense ratio is the annual fee charged by the ETF provider for managing the fund.?
Also, Look for ETFs with high trading volumes and narrow bid-ask spreads so that you can easily buy and sell shares when you need to. The ETF has a narrow bid-ask spread when there is? a small difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept
Consistent, regular investing over time can help you build wealth and achieve your financial goals. Set up automatic investments on a monthly basis to make investing a habit and join the MoneyAfrica community to make better investment decisions and get a more personalised advice.?
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1 年Firstly, I agree with the author's assertion that TikTok trends can significantly impact our financial decisions. Social media platforms such as TikTok have a significant influence on our behaviour and choices, including how we spend money. The constant stream of viral trends and challenges can easily lure us into impulse buying or adopting unsustainable spending habits, leading to financial instability in the long run. Moreover, the author's suggestion to be intentional about our social media consumption habits is an excellent approach to avoid falling prey to TikTok trends that can negatively affect our finances. We need to be mindful of the content we consume and actively seek out resources and advice on how to make informed financial decisions. Therefore, we need to be intentional about our social media consumption habits and make informed financial decisions to ensure long-term financial stability. Thanks Oluwatosin-Olaseinde for sharing.