TikTok’s Impact on Our Finances and Minds

On the face of it, it seems absurd. Why would people make decisions based on what they heard on an app affiliated with China’s Communist government?

Most people don’t view the phenomenon of TikTok influencers through that prism, yet that scenario aptly describes the choices made by millions of Americans each day. Above and beyond the question of whether the app should have anything to do with the Chinese government (and it shouldn’t) lie larger existential questions about the nature of 21st-century society.

Profligacy as Narcissism

A recent Wall Street Journal article examined the effects of TikTok on Americans under 30. The piece featured several disturbing quotes and examples of questionable financial behavior, based largely upon what so-called “influencers” do and say on social media:

• One 20-something financial analyst said she uses a budgeting app “to be able to afford the things she feels she has to buy, like Lululemon leggings. ‘Between TikTok and having your friends around you, you’re pressured to buy the things because you want to fit in. … That’s always been the case, but with TikTok it’s more prominent.’”
• “Some 91% of Gen Zers say they have purchased something they saw on social media, according to a survey from Citizens Pay, a buy-now-pay later service.”
• “BreAunna Rodriguez, a 23-year-old mom of two in Houston, likes to buy TikTok-popular baby clothes and other small things for herself, including eyelash extensions, coconut oil mouthwash, and a pumice stone that influencers said reduces stretch marks. ‘It’s hard not to buy things if they say it’s good for me,’ she says.”
• One 28-year-old lawyer noted that “there’s an internal pressure among my age range to constantly have these experiences and share them.”
• The financial analyst said she bought a Stanley tumbler six months ago: “‘I held out as long as I could,’ she says, adding that she had bought several other water bottles that were trending on TikTok.”

The Journal article also notes a strand of financial supersavers on the app. As with most things social media-related, both extremes get the most clicks, such that “there are Dave Ramsay TikToks that warn of the evils of debt, followed by influencers showing off their shopping hauls of skin care products and handbags.” Little wonder then that financial advisers have coined the term “money dysmorphia” to reflect the distorted sense of priorities among some young adults.

‘Influencers’ Are Professional Pitchmen

The quotes from the Journal article reveal the pernicious nature of social media and the warped picture it presents. Start with the assertion that “it’s hard not to buy things if they say it’s good for me.” The comment belies the obvious: Professional “influencers” ultimately get paid from people buying things as a result of their videos. Products promoted by these latter-day pitchmen may or may not be good for their viewers but are definitely good for their own bottom lines.

To some, the informality of social media may make TikTok videos appear more authentic than, say, a traditional television commercial. But both still have their roots in the profit motive, meaning viewers should retain a healthy dose of skepticism. Not for nothing did TikTok create its own e-commerce engine last year, in an attempt to take market share away from Amazon and other retailers. And over and above the TikTok Shop, that app and other social media companies manipulate their algorithms to generate more clicks, and thus more revenue.

Need for Belonging

The lawyer interviewed by the Journal hit at the root cause of this profligacy when he spoke of “pressure among my age range to constantly have these experiences and share them.” But in this case, the word “share” carries a far more loaded meaning than it did just a decade or two ago.

To this observer at least, sharing experiences describes (for instance) a group of people eating a meal together in person — something that can be done rather affordably in a home if one knows how to cook. It doesn’t accurately describe something like making a TikTok video that features an “unboxing,” or shows off one’s new Gucci purse, or even displays “TikTok popular baby clothes.”

And therein lies the real problem and the true dysmorphia. This “influencer” culture — the “attention economy,” as it were — consists of people spending money to chase clicks, in the vain hope that clicks will somehow substitute for real human connection. As bad as the profligacy may be for individuals’ wallets, it speaks to a psychological bankruptcy as much as a financial one.

For better or for worse, conspicuous consumption and “keeping up with the Joneses” existed well before the modern age, as medieval castles and palaces across Europe will attest. But having that culture force-fed to us through our ubiquitous phones has placed the movement into hyperdrive. And our society would do well to take a step back and examine the depth of the alienation, anxiety, and even paranoia that our culture — where we are always connected virtually yet are increasingly disconnected in real life — has wrought.