As a financial coach and therapist who's pretty active on social media, my feed is flooded with dozens of personal finance "hacks." As many of us look for ways to score deals and save money this holiday season, it's important to vet any money advice you receive on TikTok.
Some of the advice is good -- but some tips can be risky or in some cases, illegal.
Just last month, I saw TikTok reels in my feed suggesting people try this Chase Bank "hack" to get free money. Chase Bank suffered a system-wide glitch which was letting people write fake checks to themselves, deposit them via ATMs and withdraw the money right away. This "money hack" wasn't just bad advice; it was actually promoting check fraud, which is a felony.
Most bad money advice on social media isn't this extreme, but it can still be dangerous. I've seen Instagram reels encourage followers to blindly invest in certain stocks, start buying and flipping houses or even create their own dropshipping business -- all without explaining the risks or upfront costs.
Following the wrong money advice can be financially devastating. As an expert who shares personal finance advice online, consider these tips before blindly following any social media money hack.
Read more: Money Anxiety? Here's the Expert Advice I Followed to Get Smart With My Finances
Always do your research
Don't make a big financial decision based on a 30-second TikTok video. Instead, take time to research the topic and ask questions.
For instance, a simple Google search about the Chase glitch would have brought up news articles explaining that this "money hack" was actually check fraud.
Look for credentials
TikTok and Instagram can be helpful, but they're mainly sources of entertainment. Financial advice can be redundant and boring, which is why social media influencers may be inclined to "make it interesting" by giving risky advice.
I recommend looking for a certified financial planner, financial coach, accountant or certified public accountant. You may choose to follow them on social media instead of influencers to make sure the advice you're getting isn't risky.
Run from "free money"
If something feels too good to be true, it probably is. An influencer sharing a way to make "free money" is probably trying to sell you an investment opportunity or multi-level marketing scheme that may be encouraging you to try something illegal.
The legitimate ways you can make money are generally slow -- earning interest on your savings, growing your 401(k) or making passive income.
Consider the risks, not just the reward
As a financial therapist, I've seen how stress impacts my clients' decisions. When you're facing debt or stacks of bills you can't pay, you're more likely to focus on the "reward" part of financial advice rather than the risks.
I encourage my clients to tap into their intuition and pay attention to the emotional side of their financial choices. Journaling is a great way to do this.
You can start by making a pros and cons list. Jot down the benefits, risks and even questions you may have before making your next move. Then, research answers to those questions or meet with an accredited financial expert to learn more.
There's no shortcut to wealth
There's no secret way to get rich overnight, but there are proven steps you can follow. While not all social media financial advice is bad, stay cautious when you're following online money advice. As you figure out what's best for you financially, some steps remain. Live below your means, build an emergency fund, manage your debt well and make sound investments that you feel confident about.
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