Everything finance TikTok gets wrong about saving money, according to experts

• Finance content is gaining steam on TikTok with money advice racking up millions of views.
• But so-called finance gurus get a lot wrong, experts told Insider.

Videos tagged with #finance have over 17 billion views on TikTok, so it's fair to say a lot of people are turning to the platform for advice about their money.

But just because a video is popular, doesn't mean its advice is good, experts told Insider.

Eric Croak, president of the wealth-management firm Croak Capital, told Insider that some traditional investment techniques "are a little archaic," and TikTok offers a way to modernize. But it's moving "too fast," he said, noting that its advice is unregulated.

"So it's a double-edged sword," he said. "You don't know who to trust and there's no way to find out."

Some viral saving methods on TikTok right now include "cash stuffing," where you withdraw cash and put it in envelopes for different needs, like rent, utilities, or eating out.

There is also the 50-30-20 method, which breaks down post-tax income into needs, wants, and savings + debt into the respective proportions.

Another it the "last three digits" challenge — transferring the last three digits of your bank account balance into a savings account every day for a year.

These techniques are generally solid and can yield noticeable results, according to Brian Chevalier-Jordan, the chief marketing officer at the business-loan company National Business Capital.

The cash-stuffing method, for example, is "simple, visual, and easy for anyone to adopt."

"Good, helpful advice on TikTok tends to include simple, clear and easy-to-replicate steps," he said.

"However, big problems emerge when people promote complicated, risky, or challenging-to-implement financial strategies."

On TikTok, everything is about getting rich quick, Croak said, but "80% of the time they're wrong or they're just not showing the underlying negatives."

"They cast these things in such a pretty light without showing what could happen on the back end," he said.

For example, there are life-insurance salesmen "all over TikTok," Croak said, selling indexed universal life (IUL) insurance and promising large returns. Others push the concept of "infinite banking" — becoming your own bank by taking out loans against a permanent life-insurance policy. These methods can generate profits, but it usually takes experience and knowledge to do so without creating problems.

"These guys are coming up here saying, 'Hey, there's no risk to doing this, this is what rich people are doing,' and they go through this whole spiel," Croak said.

"TikTok essentially blasts this information out to the masses, to people that don't have the experience or necessarily the money to be able to invest in stuff that has that high-risk outlook."

Unregulated areas like cryptocurrency and complex real-estate deals are another big problem on social media in general, promising big rewards that are often unfulfilled.

What grabs attention and generates views isn't necessarily going to be the best financial advice, Croak said, because investing is, at its core, dull.

"Investing should not be that fun," he said. "My job is so boring most of the time. Like, 'Hey, stick to the plan, don't change things.' And that does not work as well on social media."

With scams so rife on social media in general, anyone who wants to start their investing journey would likely benefit from turning to experts, at least at the beginning.

When it comes to who to listen to, Croak said you should always think about "who is paying the bills" for that advice.

From there, try to work out if the products and methods they are recommending are lining their own pockets at your expense, even if it doesn't seem like it costs you anything.

"For every financial product out there, there's a trade-off," Croak said.

"For every winner, there's a loser. And so finding out what the negative consequences could be to every investment choice at least puts you in a well-educated position, to make decisions that work for you."