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Gen Z Women Drive Spending Trends on TikTok
December 6, 2023
“TikTok is driving consumption patterns in a very real way,” Ellyn Briggs, a brands analyst at Morning Consult, told CNBC.
Increased exposure to influencers and online icons on TikTok, who create eye-catching, aspirational, and relatable content, is driving a rise in spend amongst Gen Z women. “TikTok is a Gen Z women-centric app, and it is setting the tone and the narrative for what is ‘hot’ online,” said Briggs.
According to Morning Consult, 75% of Gen Z women use TikTok in comparison to 62% of men who use the platform. This increased consumption is exposing them to the dangers of unhealthy debt from spending money on things they can’t actually afford in order to keep up with trends.
Morning Consult found in February this year that TikTok has a huge influence on how the young generation spends their money, with the hashtag “TikTok made me buy it” garnering more than 8 billion views.
According to experts, many influencers post videos showcasing products they’ve recently bought from brands. However, their capacity to spend can be deceptive. Even though influencers might be within the same age bracket as their audience, most generate a high income from their social platforms and brand deals or are sent free products to try and promote.
“The bigger conversation is just how impactful our digital lives are on our real lives,” said Briggs. Social media platforms such as TikTok take the impact to a whole new level, especially with Gen Z. With a generational culture that has a fear of missing out (FOMO), it’s easy for things to get out of control with increased online consumption.
Speaking about social media habits, certified financial planner Shaun Williams, partner and private wealth advisor of Paragon Capital Management located in Denver, said social media is like “the current, younger generation’s version of keeping up with the Joneses.”
Sophia Bera Daigle, a CFP and the founder of Gen Y Planning in Austin, Texas, said that the best thing someone in their 20s can do is to “stay out of credit card debt.”
Experts say it’s important for young women in their 20s to remember two key things when it comes to influencers and viewing their expensive lifestyles.
First, CNBC stated, “Someone who shows their wealth in what they own or wear only shows you what they spent, not what they have invested or saved.” According to Williams, “When you see signs of wealth, that is not someone who’s wealthy: It’s spent, it’s gone.”
You also have no way of knowing how people online are affording their lifestyles. For example, influencers on TikTok, Instagram, and other social media platforms might have a sponsorship deal with companies to get others to buy into their products via their platform. “They’re not actually always spending their own money” on the products they promote online, Williams noted.
The second thing to bear in mind is that women can have a harder time from a monetary perspective because of obstacles such as the wage gap. According to the National Partnership for Women and Families, “In 2022, women earned 78 cents for every dollar men made.”
Social media can lure people in to spend more than they can afford, but Daigle said, “It helps to remind yourself of more powerful ways to use that money, whether that is investing in a retirement account, building emergency savings or preparing for other goals.”
“Laying the groundwork in your 20s is wonderful so that in your 30s, you can really turbocharge your financial goals,” she added.
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