Is #FinTok really building a financially fit generation?

Last updated on 2nd October, 2024 at 11:52 am

The rise of #FinTok has opened the world of financial literacy to a new generation and broader audience. But is social media, particularly TikTok, helping Gen-Zs reach their financial goals?

Reading time: 3 minutes

In this article, you’ll learn:

• How many people in South Africa use social media and the growth of #FinTok.
• The impact social media is having on how we approach money, especially Gen-Z.
• Whether this new approach to finances will help Gen-Z to retire early or not.

According to recent data from the Global Digital Report 2024, 26 million South Africans – or 42.8% of the population – use social media. Of these users, 73.6% are active on TikTok, surpassing Instagram and X (formally Twitter). #FinTok is one of the most popular categories, having grown by 373% over the last year and searches for #personalfinance advice now exceed those for health and recipes by millions!

This, of course, is having an impact on how Gen-Z approaches their money, 58% of whom globally claim to get their financial knowledge on social media platforms. “One of the key differences between this generation and previous ones is that they are a lot less conservative and private and more open when it comes to discussing their finances,” explains Farzana Botha, Senior Communications Manager at Sanlam Risk and Savings. “In the past, there was a limited amount of information being exchanged, whereas now you can simply open social media for tips on how to save money, how to budget, and how to invest.”

Read more: Ways to start investing with R10

The effect of this has been both positive and negative. “While there is still a risk when following the advice of strangers online (who may or may not be qualified to dispense it) and falling for misinformation, this openness has also had a positive effect on financial literacy – something that has been historically lacking in South Africa, especially among women, due to social and political constructs,” she says. “With the internet being more available, people have instant access to information to guide them in their financial decision-making.”

The future of Gen-Z finances

With so much information available, how could this potentially affect Gen-Z when it comes time to retire? This generation has big aspirations, with many of them hoping to achieve financial freedom young and retire early. Considering their savviness, this might be a possibility. “They’re not thinking about long-term saving and investing and waiting until they are 60 to retire – they’re thinking about growing their wealth right now and they do this by having several streams of income and not settling for mediocre employment or remuneration,” says Botha.

“Because they are always looking for ways to grow their money and have financial independence as a goal, we might see Gen-Zs becoming wealthier and more secure than Gen-Xs and the millennials combined. They have already overtaken previous generations in terms of wealth distribution and, if they carry on in this trajectory, there’s a good chance they will be one of the first groups to earn more and retire earlier than their predecessors. We always thought that we needed to look to the generations that came before us to gain knowledge and learn about the ins and outs of the financial realm. However, there is so much that Gen-Z can teach us about agility, adaptability, resilience and entrepreneurship, and, as long as we are selective and exercise caution when it comes to whose advice we follow, we could all benefit from getting some easy-to-understand bits of financial information from social media.”

Read more: What is the best and worst advice these financial experts received.