As one of the fastest growing social media platforms boasting 1.1 billion active daily users, many of whom young people (47% of TikTok users are under 30), it should perhaps come as no surprise that many people are getting their daily dose of information from TikTok today. This includes personal finance content as well that consists of educational videos and challenges.
In this article, we look at 7 personal finance trends on TikTok and what we can learn from them.
#1 Cash Stuffing
Source: TikTok
Cash Stuffing starts with drawing out your income at the start of the month in cash, and then stuffing them into a binder or envelope (such as this one). The envelopes are typically labelled with categories to portion the money out for various things.
For instance, one might have a category labelled ‘Holiday’, and another category labelled ‘Christmas’, and cash from each month gets ‘stuffed’ into these categories as a way to save for those things.
It is not strictly necessary to have all the money in cash. Some TikTokers print out placeholders to represent large sums of cash (such as a $1,000 note), so the actual money could be in the bank rather than a physical envelope. However other than large denominations, most of the cash usually resides in the binders or envelopes.
Cash Stuffing is useful in teaching us about proper budgeting and disciplined spending. Since the money is kept in the binder category, it is not as easily accessible to spend it on something else on a whim.
Read Also: Understanding The Savings Gap: What Do Singaporeans Look For In A Savings Account
#2 No Spend Challenge
The No Spend Challenge is a challenge that typically goes on for a month and only involves discretionary expenditure.
For each day that no discretionary expenditure is made, the TikToker will colour that day green on a printed or digital calendar, otherwise it will be coloured in red and the expenses are listed down.
Source: TikTok
This challenge is mainly meant to raise awareness about how we can practise spending discipline and to impulse buying. However while some TikTokers rave about how much money they saved, it seems like this challenge is mostly a one-off rather than an enduring money habit.
#3 52-Week Savings Challenge
The 52-Week Saving Challenge runs for a full year so it’s a year-long commitment.
For the first week, a small amount is set aside and saved. For example, $10. The next week, this amount is increased.
Most TikTokers also have a fancy spreadsheet or printed paper to colour or tick when their week’s saving goal has been met. This is not mandatory, as some TikTokers just use lines drawn on an exercise book for that.
Source: TikTok
The upside of this saving method is that it can help the user wean off unnecessary expenditure at a gradual rate.
This has to be decided by the individual. Increasing the saving amount by too much each week may mean we end up having an unmanageable weekly savings goal towards the end of the challenge. Nevertheless, since this trend lasts for a year, there is a better chance that it creates a more long-lasting habit.
Read Also: Beginners’ Guide To Fixed Deposits In Singapore
#4 100 Envelope Challenge
The 100 Envelope Savings Challenge uses a binder (such as this one) with pockets numbered 1 to 100. Each pocket is meant to contain money that is equal to the number of the pocket (e.g. Pocket 25 should contain $25). The total sum one would save at the end of this challenge (if you complete all 100 envelope) is $5,050.
Source: TikTok
Savings do not have to be made on a regular time basis, but it can be made when you receive income. Just like the other savings challenges, the 100 Envelope challenge comes with a sheet that you can tick or colour once you have made savings in each pocket. It’s a fun way to track your saving goals.
#5 Frugal February
Frugal February is a trend that typically begins in February.
Unlike most of the other challenges in this article, Frugal February does not actually have any set method, however some TikTokers have shared their own personalised rules in observing Frugal February.
One TikToker shared that she created a bank account with a $0 balance and then transferred savings from not spending into that account, and checked the account balance every day.
Another TikToker set a few rules for the month which included no purchasing alcohol, no nonessential purchases and using what she owns first. Just like the No Spend Challenge, this challenge lasts for only a month.
#6 503020 Rule
The 503020 rule is a trend where a TikToker may explain budgeting for wants and needs, and the numbers are a recommendation to allocate your budget – 50% for necessities, 30% for wants and 20% for saving.
As the TikToker will usually explain, everyone’s income and financial situation is different, and everyone may evaluate wants and needs differently, however this will still be a good starting benchmark for how to budget for things.
Read Also: 4 Money Lessons To Teach Your Child Using Their CNY Angbao Money
#7 Loud Budgeting
Loud Budgeting is a trend designed to tackle the problem where peer pressure during social outings influences young people to overspend. For example, when eating with a group of friends, it may be tough to choose where you are eating, and sometimes it may be an expensive place. One may choose to sit out the gathering, but this may result in diminished social life.
Loud Budgeting encourages young people to set spending boundaries and being willing to speak up about it when faced with pressure to spend. Sharing your money goals with them will ensure that they will plan budget-friendly outings to ensure that you can join in. As an added bonus, they can also help keep you accountable.
Encouraging Good Money Habits
Most of these trends are centred around budgeting and savings, some are month-based challenges, others may encourage savings as a long-term habit. Some young people may find these trends useful as a life-hack to help them be more disciplined with saving. Ultimately, these trends can be modified to suit your needs, and do not need to be followed strictly.
Read Also: 5 TikTok Accounts You Can Follow To Learn Personal Finance Concepts – In 60 Seconds Or Less
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