The opposite of a microtrend, the creator economy is here for good. Set to grow to almost half a trillion dollars by 2027 (compared to $250 billion today), it’s an increasingly enticing industry for young people. One in three between 18 and 30 aspire to be influencers, and as influencer marketing continues to ramp up, it’s a more viable career option than ever.
But while effortless overnight success seems to come to many creators, social media can often be nothing more than a highlights reel, showing an unrealistic version of events. For every breakout internet personality, thousands of young creators are failing to succeed and struggling with an unpredictable freelance career. And with every viral video, millions of Gen Zers’ perceptions of financial success are being warped.
Enter the social finance app Frich, whose co-founders Katrin Kaurov and Aleksandra Medina are on a mission to provide Gen Z with real, data-driven insights into how their peers manage money.
Gen Z has “skewed ideas of what it means to manage a budget” because of what they see on social media, explains Kaurov. Being constantly exposed to financially aspirational content – whether it’s “creators like Mr Beast, who regularly gives away huge amounts of money, or 17-year-old TikTokers buying their own house” – makes it easy for Gen Zers to believe that’s the norm for their age and life stage. With Frich, users enter their age, city, profession and salary before seeing benchmarking data on what their peers are spending on items such as rent, concert tickets and clothing.
“You might go to a bar with your friends, for example, and not feel like you can afford to buy a round of drinks; but if you’re on Frich, you can discover that you might be earning above average for someone your age in your city, and therefore you probably can afford those $17 espresso martinis,” Medina says.
The Frich founders built their company out of lived experience. Kaurov and Medina saw “unattainable, extravagant lifestyles” online while “grappling with the realities of budgeting, worried our cards would get declined” when they shared a student apartment in New York. They felt the effects of negative comparison and wanted to make money more transparent.
Behind the alluring influencer lifestyle lies a different reality – as Kaurov puts it, “it’s essentially a freelance job, which comes with its own unique financial challenges.” A career in content creation is unpredictable, with fluctuating income and instability based on ever-changing algorithms and audience desires.
For the Frich co-founders, financial literacy is a key skill for all Gen Zers, particularly those wanting to be influencers or planning to monetise their social followings. The skills for managing “inconsistent income and no benefits” are as crucial as building an audience, says Kaurov, who has over 40,000 Instagram followers herself thanks to a previous career as a teen model. From her perspective, building a personal brand requires the same time, money and dedication as building a business.
As the creator economy matures further, the Frich co-founders are seeing a counterbalance to the unattainable wealth springing up on TikTok and other social platforms. The rise of the micro-influencer – which Medina describes as a creator with “a smaller but more cultivated and tailored audience” – is shifting the financial dynamics online for content creators. Unlike the early days, when influencers became millionaires within months, micro-influencing can be a more sustainable way of building and retaining an audience, and therefore a more sustainable way of building a career in content creation. Creators who are more relatable or on a more typical salary can “encourage more transparent and open conversations about money online,” according to Medina.
Such influencers are a breath of fresh air in contrast to widespread misinformation on social media. A recent Moneysupermarket study found that 74% of financial advice given by influencers is incorrect, dangerous or misleading. Frich seeks to puncture misinformation online and direct its users to influencers who are “sharing how they repay their debt, how they maximise their credit card points and negotiate their phone bill contracts,” according to Medina. 82% of Frich users have never used a buy now, pay later scheme, for example: evidence that its financial literacy resources are working. Although the Frich co-founders advise exercising caution when consuming social media content, Kaurov caveats that “social media can be a great resource for finding life hacks or inspiring personal stories if you follow the right accounts.”
Ultimately, whether creating or consuming content, Gen Z feels adrift financially. Medina sums it up: “You don’t know what you don’t know. Most Gen Zers have no idea how they’re doing when it comes to finances, and what they’re searching for is the affirmation that they’re normal, and that they’re doing OK. They don’t want to compare themselves to luxury influencers and feel like they’re failing all the time. Instead, they want a vibe check from their peers that they’re on the right track.”
Check out my other stories on the passion and creator economy – how creators, entrepreneurs, and regular people use social media to form new career paths.