The kids are getting “lit” — financially literate, that is.
Self-styled financial influencers are giving Generation Z some much-needed advice, touting a month-long “financial cleanse” as the ultimate way to whittle down spending in 2023.
Seema Sheth, who coined the “30-day financial cleanse,” boasts her method as a way to cut down on 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 is no “get rich quick scheme,” she insisted, promising to give viewers “actionable” steps each day that will make their “financial life a little bit better.”
With mounting student debt and more young adults fleeing their jobs as the “Great Resignation” epidemic endures, these crash courses delivered via TikTok may be the best way to reach the online masses.
“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 GWU’s Global Financial Literacy Excellence Center. GFLEC’s research has confirmed that our youngest adults are ill-equipped to manage their bank accounts.
Not to worry, though, the TikTok experts are here. The platform is flush with cash savvy creators who can help viewers get the most out of their moolah without all the hoopla. And to ease the anxiety Gen Zers feel about their finances, they’re boiling it down to the basics, taking it step by step.
And that’s a good thing. 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 content creators than school or books.
“I’m introducing to you the building blocks of financial literacy,” Sheth stated in her Dec. 30 video, promising that her 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 tag. But here comes the tricky part: participants have to decide which ones are worth their hard-earned cash, and immediately cancel the ones that aren’t.
The next strategy is called the “bucket budget.” In other terms, people’s expenses fall into three categories: fixed, variable and saving. Then, there’s discretionary spending — and it can be the hardest to tame, according to Sheth.
So far amid Sheth’s cleanse, which continues throughout the month, viewers seem grateful for the tough-but-fair approach to finances.
“I’m loving this series so much, even though it hurts,” one TikTok user wrote. Another agreed, “I’m feeling so called out.”
The TikTok page for You Need A Budget — otherwise referred to as the YNAB method by its adherents — is also known for drumming up budget-friendly dialogue on 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 objectives for the year, calling to “bring on” the next day of the challenge.
Rather than 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 finance,” Sheth said of her challenge.
“If you don’t understand it well, you don’t manage it properly, it could really ruin your life.”