Americans have a financial literacy problem: 63% of Americans are financially illiterate, according to a survey from the Global Finance Literacy Excellence Center.
This is not surprising when you consider that only six states require high-school students to take a personal finance course. But there is hope, and it comes from an unlikely platform: TikTok.
Owned by Chinese conglomerate ByteDance, TikTok is having a moment. Most of the content produced on the platform is lighthearted and easy to consume like lip-synch singalongs or viral dance moves. Clips are limited to a 60-second duration but the average video is around 15 seconds. In March, the app was downloaded more than 11 million times, with many Americans starved for new content while under pandemic lockdown.
TikTok recently announced a new initiative, #LearnOnTikTok. The program will fund various educational videos in order to provide learning opportunities during the Covid-19 lockdown. The content is being funded through TikTok’s $50 million creative learning fund, which is apart of its broader $250 million commitment to assisting with the impacts of the pandemic.
One of the content creators receiving funding is Dr. Brad Klontz, an expert in the science and practice of financial psychology, behavioral finance, and financial planning. Klontz joined TikTok in October of 2019 and now has over 72,000 followers.
While twitter may have become the go-to forum for some of Wall Street’s wisest, from billionaires to financial advisors, TikTok creates a cozy and arguably organic atmosphere. A great deal of FinTwit activity may be irrelevant to your investment portfolio let alone personal finance advice. “The information shared between members and then debated, seems like it would suffice for post-graduate education,” Michael Policar, a Washington Stated-based wealth manager wrote in a LinkedIn post.
Most of TikToks users are young, with 41% of users between the ages of 16 and 24, according to Influence Marketing Hub. Any of the platforms active users can interact with content creators.
“I’m responding to hundreds of comments a day.” said Klontz.
Klontz first learned about TikTok through his 14-year-old nephews and was shocked by what he saw. “I saw some absolutely terrible financial advice,” he said.
Dismayed by what he saw, Klontz felt compelled to start producing useful content based on his financial expertise in the psychology of wealth.
Klontz’s approach is simple: create content that allows him to educate young people about the psychology of wealth while allowing him to express himself. Klontz admits that TikTok lets his personality shine through, sometimes throwing in a dance move with valuable advice. Many of his posts are motivational clips, while occasionally revealing his own financial struggles.
“There are all these young people on the platform and I have a strong mission to educate people on the psychology of wealth. A part of that is because I grew up lower-income and for me (wealth) was this big mystery.”
Financial education is a problem, but Klontz argues that most people already know what to do.
“I have yet to find a 16-year-old who doesn’t know that they should save and shouldn’t spend more than they make or at least they can tell you that,” he said. The bigger problem is people’s attitudes towards money, says Klontz.