The troubling place young adults often go for financial advice, and why
Decisions about money that young adults make today are largely shaped by their exposure to social media platforms, such as TikTok and Instagram or websites such as YouTube, and that reliance can carry risks.
According to new research from the University of Virginia, young people are getting advice from finance influencers, or “finfluencers.”
“Young folks are turning to social media as the primary source of financial advice, rather than their parents or trusted older people,” Lana Swartz, an associate professor in the University of Virginia’s Department of Media Studies, told WTOP.
She said the trend is concerning because that advice isn’t always reliable.
“The financial future for many young people is uncertain,” Swartz said.
That uncertainty may stem from several factors, including the threat artificial intelligence poses to the job market, recent political and economic changes, and what young adults and their parents have experienced firsthand.
“Some young people today, some of their earliest memories are of the aftermath of the 2008 financial crisis, they were heavily impacted by COVID,” Swartz said.
Also worrisome, the report found, is the rise of gamified investment apps and similar platforms that can encourage quick, risky decisions and even lead to addiction.
“There’s a blurring with things like sportsbook gambling, and even gambling on things like current events through prediction markets,” Swartz said.
Another point Swartz wanted to drive home was that older adults aren’t the only ones vulnerable to online scams.
“People in their 20s, 30s and 40s are just as likely, if not more likely, to fall victim to scams,” she said, because younger people conduct much of their lives online. “We also have less information because there are fewer resources and fewer clearinghouses for young people who fall victim to scams.”
What’s encouraging, Swartz said, is that many states are considering adding financial literacy classes for high schoolers.
“Everyone agrees that financial literacy is important, and that it’s underexplored and under-taught in schools, but there are no clear national standards for what financial literacy education should look like,” she said. “Whatever financial literacy curriculum looks like, it’s going to be competing with finfluencers and with online communities.”
WTOP’s Scott Gelman contributed to this report.