Let’s Get Social about Social Media

Today, it has never been easier to find content on personal finance. With social media’s ever-growing popularity and influence amongst the youth, social media influencers are generating content that threatens to amend core financial teachings that have been passed down through generations. For parents, this movement has raised immediate concerns but also a call to action to reconnect with their children and modernize the way these lessons are shared.

 

At a young age, it is common to hear idioms such as “Money doesn’t grow on trees” either from a parental figure or through some form of media. Let us run with this analogy:

Roots: This idiom serves as the root for all money decisions throughout an individual’s life. The goal is for an individual to never lose sight of the sacrifices that need to be made to accumulate, protect, and meaningfully distribute capital.

Trunk: As a plant dad, the easiest observation of growth for me is at the trunk level. This is akin to the physical and mental growth we see in children as they age. Perceptions about money and habits evolve over time.

Branch: Branches exemplify the pillars of our core financial belief system.

Fruit: You guessed it! Individuals can unlock unique life experiences and leave impactful legacies through the fruits of their labor.

 

Traditionally, parents have taught their children about the value of money by opening financial accounts, setting up piggy banks, and reward systems for chores. While all these methods are still highly encouraged, there is a growing need to go a step further to actively engage in the financial lives of their children.

 

According to CNN News, 56% of US youth have their own social media accounts. 80% of all teenagers (ages 13-18), compared to 23% of all tweens (8-12) were reported to have social media accounts in this study. Social media has spawned influencers that wield undue influence over their followers. For the youth, their words are gospel and in turn have created harmful financial trends resulting from herd mentality.

 

As an avid TikTok user myself, I came across two recent Financial Tiktok (FinTok) trends that shook me to the core:

1. The Sephora Kids Challenge: Pre-teen children made it trendy to spend lavish amounts of money on skin care products at Sephora with one child reportedly spending upwards of $500 at the store.
2. Life Insurance over 401(k)s as the best long term investment vehicle: FinTok influencers spread harmful narratives that investors, mainly young professionals should consider moving their nest eggs away from 401(k)s to life insurance products due to “high fees and restrictive access to funds during pre-retirement ages.”

The biggest issue with financial advice on these platforms is their ability to immediately capitalize on the impulsive nature of viewers. Apps like TikTok now have built in-app stores that house these “must-have” items. As it gets easier to consume items with just a click of a button, children are losing sight of the stories and messaging behind every hard-earned dollar.

 

While it may be easy to quickly refute these narratives from an advisor’s perspective, the biggest value-add we can provide to clients is advice that trickles down generations.

 

At RPJ, we tailor financial plans and advice with our client’s personal stories and family history at the forefront. We want to empower our clients to have impactful and productive financial conversations at the dinner table.

 

How can you actively engage in the financial lives of your children in this digital age? Here are some tips:

1. Volunteer: At times, the best way to showcase the impact of hard work and resources is at the volunteer level. Volunteering with children can provide healthy psychological benefits while helping others that are less fortunate.

2. Listen first, advise second: Like any successful client-advisor relationship, listening is key for children to feel heard and opens an opportunity to peer into their money beliefs.

3. Participate: It may be beneficial at points to meet your child where they are by setting up accounts on the platforms they use. This can serve as an educational and collaborative process.

 

Social media platforms continue to welcome an influx of financial opinions and instructions from people that may not have the best interest of the public in mind. Parents should not underestimate the influence social media is having on children.

 

 

Sources:

CBC News: https://www.cbc.ca/news/canada/sephora-kids-trend-controversy-1.7088691

CNN News: https://www.cnn.com/2018/06/22/health/social-media-for-kids-parent-curve/index.html

The Elm: https://blog.washcoll.edu/wordpress/theelm/2024/04/sephora-kids-point-to-the-overconsumption-of-tiktok-trends/

 Nasdaq: https://www.nasdaq.com/articles/tiktok-says-life-insurance-is-a-better-bet-than-401k-plans-heres-why-an-economist-says

 

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