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Gen Z Women are Spending More Money Than Ever on Products Promoted by TikTok Influencers

Experts are highlighting the financial risks associated with the exposure to influencers and the allure of consuming products recommended by influencers.
UPDATED JAN 22, 2024
Cover Image Source: Pexels | Pixabay
Cover Image Source: Pexels | Pixabay

TikTok has emerged as a social media powerhouse, particularly among Gen Z​ women who are not only shaping cultural trends but also influencing spending patterns. But as this demographic spends more time on the platform, experts are highlighting the financial risks associated with the exposure to influencers and the allure of splurging on the products that are recommended by them.

Not everyone can afford everything. Don't fall into the trap of making people happy and feeling pressurized so that you can fit in. That only leads to jumping off your budget|Pexels
Gen Z group of buddies enjoying a drink | Pexels

Ellyn Briggs, a brands analyst at Morning Consult notes that TikTok is a Gen Z women-centric app that sets the tone for what's considered "hot" online. The platform's short-form videos have become a breeding ground for influencers who create aspirational content, often showcasing recent purchases in "haul" videos. Although the financial reality behind these influencers' spending habits may not always be apparent, it doesn't stop young women from spending on the lifestyle they see in those videos.

Image Source: Pexels/
Tracy Le Blanc
Social media apps on phone | Pexels/ Tracy Le Blanc

The digital realm's impact on real-life consumption is a reason for increasing concern. The blurred lines between the virtual and real worlds are exemplified by the #TikTokmademebuyit trend, amassing over eight billion views in February 2023, according to Morning Consult. Gen Z women, constituting 75% of TikTok users, are more immersed in the platform's consumer-driven ecosystem than their male counterparts (62%).

Certified financial planner Shaun Williams draws parallels between social media and the concept of "keeping up with the Joneses" for the younger generation. Unlike previous generations who primarily observed shopping habits within their local communities, Gen Z now faces the challenge of keeping up with online influencers, battling the pervasive fear of missing out (FOMO).

Spend only on affordable fashion as the habit of window shopping and adding all items to the cart can empty your bank account leaving you with nothing productive|Pexels
Gen Z women find themselves succumbing to FOMO-driven spending (representational image) | Pexels

Oblivious to economic pressures, such as a high cost of living, Gen Z women find themselves succumbing to FOMO-driven spending. LendingTree reports a staggering 99.3% increase in nonmortgage debt among Gen Zs between March 2021 and the first quarter of 2023. The average debt per individual in this age group went up to $10,797, with spikes in personal loans and credit card balances.

In response to these trends, financial experts emphasize two crucial considerations for women in their 20s.

Experts caution against equating outward displays of wealth with financial stability. While influencers may showcase luxurious purchases, it's essential to recognize that these are expenditures, not indicators of wealth. Furthermore, influencers often receive sponsorship deals, and the products they flaunt may not be bought with their own money.

The wage gap and other financial challenges can make it difficult for women to secure their financial future. Instead of succumbing to social media-induced spending, experts recommend focusing on long-term financial goals, such as investing in retirement accounts, building emergency savings, and preparing for future milestones. Establishing a solid financial foundation in one's 20s can pave the way for accelerated financial growth in the subsequent decades.