Social media, AI increasingly shape financial advice, but experts warn consumers to be cautious
PHILADELPHIA (WPVI) -- Consumers are increasingly turning to social media and artificial intelligence for financial guidance, but experts say those sources can also contribute to overspending and may not always provide reliable advice.
A new survey by NerdWallet found that nearly half of Generation Z consumers and 33% of millennials turn to platforms such as TikTok and Instagram for financial guidance.
The survey also found that more than eight in 10 consumers say they buy something at least once a year because of an influencer recommendation, while nearly half say they make such purchases at least monthly.
Experts suggest consumers can use social media more strategically by following accounts focused on saving money rather than spending. Recommended sources include financial and savings-focused content creators and organizations such as NerdWallet, The Penny Hoarder and Saving with 6abc.
By engaging with more savings-related content, users may begin seeing more money-saving advice in their feeds.
Consumers are also encouraged to research the sources of financial information they encounter online.
"Sometimes when you're scrolling through social media, not everyone is an accredited financial advisor or even has a background in finance," Kimberly Palmer of NerdWallet said. "So, you wanna make sure you understand who is giving you this advice, if they're being paid to recommend certain products. It's really important to understand those potential conflicts of interest."
When evaluating financial advice on social media, consumers should review a creator's background and qualifications.
AI tools can also help users research whether a person has training or professional experience in financial management.
As AI becomes a more common source of financial information, experts say it can be useful for answering general questions but should be used carefully.
"Well, asking AI for financial advice can be a really helpful starting point, especially if you have some general questions about how to budget or understanding different financial products, but what you want to be careful of is entering too much of your own personal information," said Palmer.
Palmer said avoid uploading tax returns or other financial documents containing personal information to AI platforms.
She also recommends seeking a second opinion from a financial professional or trusted source before acting on advice found through AI tools or social media.
Another trend gaining attention online is "de-influencing," in which creators call out products they believe are overhyped and encourage consumers not to make unnecessary purchases.
Advocates say the trend could help counteract some of the overspending that social media recommendations can encourage.
