Even if you’ve never heard the viral term, you may already know about loud budgeting. This budgeting trend simply means that people are very open with what they have and may set certain boundaries with friends and families to prioritize their money.
The idea of loud budgeting is to empower more people to be comfortable with speaking up about the financial goals that they are prioritizing. This can mean communicating about incomes, expenses, and savings. However, there can be a lot of questions that surface with loud budgeting, such as “What are the benefits?,” “Does it really work?,” and “How can I stick to it?”
How Does It Work?
Loud budgeting works when you vocalize why you might not choose to spend money—even if you have it. When you speak up about your finance goals and others know where you’re at, it not only helps you stick to a budget, but it also helps you not experience guilt or FOMO (the fear of missing out) when you say no.
For instance, say you make a goal to pay off your car loan. If you have to say no to a dinner out with friends, you can feel confident knowing that they understand your financial goals and won’t pressure you to join. They may even offer up a free activity instead, like hiking! Just remember, as important as it is to save and budget, you should try to find a healthy balance between putting money toward your savings and doing things that bring you joy. Saying no to everything can eventually take a social and emotional toll on you.
What Are Its Benefits?
Here are just a few reasons you might consider adopting the practice of loud budgeting:
- Accountability: Sharing your goals (paying for college, taking a spring break trip, or buying a car) with others creates a support system. This transparency opens up conversations about your financial priorities and keeps you motivated.
- Increased Financial Awareness: As you become more aware of your income, expenses, and savings goals, you can more confidently identify areas where you can improve money management.
- Enhanced Goal Setting: Tracking your progress and hitting milestones helps you feel a sense of accomplishment and keeps you focused on achieving your goals.
How to Practice (and Stick to) Loud Budgeting
Loud budgeting may be about managing your money, but it shouldn’t stop you from enjoying experiences that really matter. It ultimately allows you to see where your money is going and then get rid of certain expenses that are holding you back from your goals. Here are a few practical ways to practice and stick to loud budgeting:
- Pay Yourself First: Set up an automatic system through your bank so that as soon as you get paid, a set amount of money goes straight to savings. Once it’s out of sight, it’s out of mind.
- Digital Budgeting Apps: Budgeting apps are a great (and easy) way to track your expenses automatically, set budget limits, and receive notifications when you overspend.
- Envelope System: This money-saving system was created by Dave Ramsey, a financial expert who helps others gain control of their money. It involves labeling envelopes with specific spending categories such as groceries, dining out, gas, utilities, savings, and rent. This ensures that every dollar has a purpose and you can track exactly where your money is going. If you find you are consistently underspending in a category (like entertainment) you may decide to move that extra money towards a savings goal.
- Avoid Impulse Purchases: Fight the urge to buy something on a whim! Before heading out to run errands, write down exactly what you need and stick to the list as much as possible to avoid getting sidetracked. You might even put a time limit on it. For example, if you see something you really love, don’t buy it right away. If you still want it after X amount of time (and it fits in your budget) then go for it!
- Find Ways to Cut Expenses: Every penny counts, so see where your money goes. Are there subscriptions you rarely use? Daily coffee runs that add up? Maybe that gym membership you rarely use could be replaced with free YouTube workouts. You might even consider packing lunch more often to avoid eating out. There are always ways to save more, you just have to look for them.
Loud Budgeting: Fleeting Trend or Here to Stay?
So, is loud budgeting just a trend that millennials and Gen-Z are hopping on because it’s trendy? While it may have started on TikTok, finance experts actually stand by it. “Being authentic and having boundaries around how we are spending our money, along with being able to communicate that message to the world around us, will lead to saving more money and paying off more debt,” said Alaina Fingal, a CNET Money expert and owner of The Organized Money. She believes that while anyone can practice loud budgeting, millennials and Gen Z are more likely to do so.
Social Media’s Impact on Spending
Social media can heavily influence spending, especially for millennials and Gen Z. With the right marketing, it can be easy to get influenced into buying just about anything, leading to financial stress and guilt. However, positive trends like “loud budgeting” on social media can help people stick to their budgets and have better money conversations.
Bernadette Joy, a personal finance coach says, “Fewer people want personal finance content that glamorizes how much someone makes. Instead, people want content that offers tangible steps to tackle financial goals and stresses, like tips to help pay back student loans.” Consuming this type of content can make it easier to manage finances without feeling pressured by influencers.
Loud budgeting may be a new term, but it’s not necessarily a new idea. It’s a budgeting strategy that allows you to stay committed to your goals by being honest about them. By loud budgeting, you can focus on what truly matters and spark healthy conversations about money. Make sure that your goals and expectations are realistic. And don’t forget to share them with those you trust so they can support you on your money journey.
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