Australians are turning to social media for financial advice and discretionary spending
Aussies are spending almost $500 a month on discretionary purchases via social media and apps, according to a new study from UBank.
This amounts to an average spend of around $6,000 a year.
When broken down into age groups, the biggest spenders were millennials (roughly aged 25-40), followed by Gen X who are in their 40s and early 50s, then Gen Z (the under 25s), and finally the over-50 baby boomers.
This is an interesting spread, considering younger generations are increasingly looking to social media influencers or dedicated online channels for personal finance information.
The future of personal finance: Fintech and social learning
A recent survey from insurance and super provider MLC saw 13% of respondents aged between 18 and 34 say they regularly use platforms like TikTok, Facebook and Instagram as a financial resource. Another 4% listed social media as their most trusted source of financial information and guidance.
This is no surprise to Justin Joffe, one of the cofounders of Flux – a personal finance app and news source that offers everything from business newsletters to savings games, credit score checks and business podcast chats.
Joffe and his fellow cofounders, Brett Joffe (they’re cousins) and Gus Hoirisch, started Flux in early 2020 on a mission to “build the future of financial education through gamification and community.”
“We felt there was more we could do to incentivise young Australians towards positive financial habits,” Joffe says.
It started with creating a game to help people understand and access their credit scores, and has now grown into a community of more than 200,000 across multiple platforms and services.
One of the group’s latest inventions is an app which encourages users to contribute to their savings account each week by combining the instant gratification of a game with the long-term benefits of savings.
“If they save $25, they get a ticket to guess a seven-digit code where you can win up to $250,000 every week,” Joffe says.
More generally, Flux is focused on removing stigma around discussing financial matters, so younger generations can improve their financial literacy.
“Young people are becoming much more open around their finances, whether that’s positive things like investment games or how to overcome debt.”
But Joffe also warns people to be wary of where they source information, especially in the digital realm where people may be disseminating advice without the relevant financial experience or licencing.
“We see financial influencers, aka ‘finfluencers’, promoting certain investments without any justification for that investment,” Joffe says.
“Basically, every person you hear from online, take it with a grain of salt.”
If you’d like to learn more about social finance trends, check out episode 39 of The Finance Burrito podcast. For this episode, the Mozo team spoke with Flux and marketing and economics experts about social media and developments in digital financial literacy.