If you’re on TikTok, your FYP is probably full of a variety of videos, including financial tips. Influencers have been sharing money hacks for years on TikTok to help viewers use their credit cards wisely. But which money trends are actually effective?
We’ll detail some of the most popular money hacks that financial and lifestyle influencers have been known to push on their platforms. We’ll share the pros and cons of each hack to help you decide if it's worth trying.
No-spend challenge
The no-spend challenge on TikTok involves committing to not spending on non-essential items for a set period. These non-essentials include eating out, entertainment, new clothes, and more, while essentials include groceries, rent or mortgage, utilities, gas, and insurance. You can choose the time that you follow the challenge, whether it be for a weekend or a whole month.
This challenge helps you realize what you actually need and what you can live without, and may save you money.
Loud budgeting
Loud budgeting is another popular trend that empowers you to stick to your financial goals. Amid the loud budgeting trend, TikTok users have been openly sharing their personal finances online and in real life.
For example, if a friend asks you to go out for drinks and you don’t have the money to spend right now, tell them straight up. Say, “I’m sorry, but it’s not in my budget right now,” or “I get paid Friday. So, can we wait until next weekend?” Instead of not holding yourself accountable, make it known that you’re sticking to a budget.
Loud budgeting helps others know where you stand and can also keep you accountable for your actions. Telling family and friends about your financial goals helps you feel free to say “No” when necessary.
Cash stuffing
Cash stuffing, also known as the “cash envelope system,” is a highly effective budgeting method that has made its rounds on TikTok. This trend involves physically separating cash into different labeled envelopes to stay on budget. There are envelopes for different categories, such as groceries, gas, dining, rent, etc.
Physically seeing how much money has been allotted to each category helps prevent overspending. Once each envelope’s money is gone, you shouldn’t spend any more in that category. This method can be highly effective; however, some people don’t like paying in cash only and prefer to utilize credit cards for rewards and protection.
Buy it tomorrow rule
The buy it tomorrow rule, or 24-hour rule, requires you to wait at least 24 hours before purchasing a non-essential item you see that you want. This allows you time to pause and consider if you really need the item. It’s said this can significantly reduce buyer remorse and impulse buying to help you buy only things that benefit you long-term.
5-4-3-2-1 grocery method
The 5-4-3-2-1 grocery shopping method is used to reduce food waste and stay on budget. You can simplify your trips to the grocery store by following this method. It states that you should buy five vegetables, four fruits, three proteins, two sauces or spreads, and one fun treat each week.
This rule helps ensure you have whole foods on hand so you can make healthy meals at home. Another benefit of this method, beyond reducing food waste and saving money, is that you prevent decision fatigue. However, for some people, this may not be an effective meal planning method.
50-30-20 rule
The 50-30-20 rule is a basic budgeting tactic that gained renewed popularity on TikTok. Using this method, you take 50% of your after-tax dollars and allot them to needs (rent/mortgage, utilities, basic groceries, etc.), 30% to wants (entertainment, dining out, new clothes, etc.), and 20% to savings and debt repayment.
This rule helps you break down your budget into mandatory vs. discretionary spending as well as reach your financial goals. To follow this method effectively, you must track your spending in each category to see how well you follow the breakdown. It can be a simple and effective budgeting method for those who are new to budgeting.
Reach your financial goals with these money trends
TikTok has significantly helped spread financial literacy tips. Lifestyle and financial influencers have shared dozens of helpful money hacks for users. These hacks can be effective for some users depending on their situation, but they may not always work for everyone. Assess your own situation and start with short tests to see if these trends can elevate your budget and help you reach your financial goals today and in the future.
Notice: Information provided in this article is for information purposes only and does not necessarily reflect the views of financemagnates.com or its employees. Please be sure to consult your financial advisor about your financial circumstances and options.
