Beware 'handy tips' online which are downright dangerous - Sarah Coles

.People film themselves over-acting while watching other social media videos - like Gogglebox but for people with the attention span of a gnat – and hundreds of thousands of people watch in awe. I’m yet to see a reaction video to a ‘finfluencer’, but I can tell you that my own would be un-broadcastable. While there are some professionals providing sensible financial tips on social media, there are also a huge number of offerings ranging from the ridiculous to the downright damaging.

You can see why people are searching for solutions to their financial problems right now. The scale of rising prices is making people increasingly desperate, and the news that Citi is forecasting inflation to hit 18% will have caused an awful lot of panic. The ONS studies show that more than half of us have already done some of the obvious, sensible things to cut costs – like cutting energy use, driving less, shopping around and cutting back on non-essentials. But with price rises at this level, for millions of people, it’s not going to be enough.

In reality we’re not going to be left to deal with this entirely on our own. Governments around the world are taking unprecedented steps to protect people from the full force of the price increases. However, at this point, the Prime Ministerial hopefuls remain tight-lipped about the details of their plans, so we don’t know what help will be forthcoming. So it’s no surprise that people are casting around for anything that might help.

It means there’s a market for social media videos showing ‘unusual things you’ve never heard of that’ll save you money’ and ‘secrets that will solve your financial problems’. And you don’t need to be on Tik Tok to see them, especially now Facebook has started including popular videos in its feed.

In some cases these tips are just pointless. For some reason, my social media chose to show me a video highlighting the myriad of useful ways to reuse laddered tights in order to save money. Should you ever want a tatty brown nylon scrunchy that slips out of your hair and falls to pieces, then it holds the answer to all your problems. However, surely the real answer is to wear trousers, so you don’t risk putting your fingernails through £1.50 worth of hosiery before breakfast.

In others, they don’t add much and come with risks that aren’t made clear. One of these is cash stuffing. For an awful lot of people, it’s the budgeting equivalent of announcing an exciting new egg-sucking technique to your granny, but it has taken off. It involves withdrawing your salary on day one and stuffing it into envelopes labelled with spending categories, like groceries and savings. You can put less in the envelopes where you want to cut back, easily see how much you have left, and stop when you run out. It’s not necessarily a hideous approach, but you’d be far better off with a budget and a good current account app. That way your cash is secure, rather than sitting around your house in envelopes. It may be earning interest too.

In other cases, the ‘handy tips’ are downright dangerous. There are all sorts of people touting the solution to buying a home without savings or making a million by day trading. Some of them just misunderstand the risks they’re taking, while others massively over-simplify things to make them seem like easy ways to make money, so they can gain followers. Others are out and out scams designed to rip people off. Scammers know how desperate people are, so they’re upping their efforts to offer something that seems like the answer to people’s problems, but will actually make everything worse.

There are, however, exceptions and some good tips out there. There are videos from journalists, experts and bloggers with reams of knowledge and experience. You can look for award-winners, and for those with a financial background. The likes of @AndyCleverCash, Jordancox.com, mrsmoneypenny.com, muchmorewithless.co.uk, mrmoneyjar and Skintdad offer plenty of useful tips.

The problem is it can be very difficult to separate the good from the bad when you’re starting out. So it can help to do a bit of digging if you find yourself drawn in my one of these videos, and there are five questions to ask:

Who are they? Does their profile demonstrate knowledge, financial qualifications, skills or experience? Bear in mind that popularity doesn’t translate to integrity, so just because something has thousands of views doesn’t mean it’s sensible advice.

What’s the context? Use the videos as a jumping-off point to do your own research, so you have the full picture. They might boast about making a fortune with an investment technique, but what was the market doing at the time? Would a wild guess and average luck have produced a similar result?

What’s the downside? These videos don’t have much time to go into the risks, the potential losses, or the problems with a particular approach. You need to explore them yourself. It always pays to bear in mind that returns always come with risk, so if they’re not explaining the risk, you need to dig it out for yourself.

Are they promising the earth? No finfluencer, blogger or Tik Toker has the secret answer to all your problems overnight. Times are tough and there are no easy answers, so hunting for them will open you up to the risk of falling for nonsense, or even worse, being taken for a ride.

Could this be a scam? If you’re in any doubt, it pays to assume the worst.

Of course, one option is to sidestep these videos entirely and go to trusted sources for your financial information, like The Yorkshire Post. Not only can you be sure you’re getting the full picture from the professionals, but you’ll also get hours of your life back and avoid getting sucked into watching endless, pointless social media videos.

Sarah Coles is a personal finance analyst at Hargreaves Lansdown