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Last Updated on March 27, 2024 by Chris Panteli
Loud Budgeting
“Loud budgeting” is among the latest viral finance trends on TikTok, aimed at helping users become more vocal about their saving goals. A recent Empower survey found over 60% of people in the U.S. are still not discussing money with their family and friends despite believing “open conversations about money are the key to financial freedom.”
“Money has often been a topic people shy away from,” says Brian Preston, CPA, CFP®, PFS, author of Millionaire Mission, and founder and host of The Money Guy Show. “People feel embarrassed to admit they can’t partake in something because it doesn’t fit within their budget or feel shame around the fact that they have a budget.”
This stigma can lead to unhealthy behaviors like shame spending and digging yourself into debt, he adds. It can look like celebrating a party with friends at an expensive restaurant even when you know you can’t afford it. It can be tempting to say “yes” to plans that don’t align with your financial goals, just because you don’t want to miss out on exciting experiences with loved ones.
The “loud budgeting” trend is the opposite, as you’re setting clear boundaries on your spending based on your financial goals, and you’re being vocal about them to family and friends, Preston says. “You might technically have the money to pay for the group trip or the night out with friends, but if it doesn’t fit into your financial plan, you’re not afraid to say no.”
In a way, the trend encourages people to make better spending decisions that support their financial goals instead of succumbing to external pressures to spend, says Andrea Woroch, a consumer finance coach.
“Loud budgeting” is a response to the high cost of living
The “loud budgeting” trend is key in today’s economically unpredictable time. With rapidly rising cost of living, housing crisis, and repeated layoffs, many are feeling the financial pinch and now being mindful of expenditure is a necessity rather than a choice.
A Bank of America survey last year found that 73% of Gen Z respondents are modifying their lifestyles because of inflation. These included changes like cooking at home more frequently (43%) rather than dining out, spending less on clothes (40%), and limiting grocery purchases to the essentials (33%).
That may be one of the reasons why the trend is catching on. “Young people are tightening their wallets and being confidently vocal about it,” says Veetahl Eilat-Raichel, CEO and co-founder of Sorbet.
Pros and cons of “loud budgeting”
One of the biggest benefits of loud budgeting is that “it’s making it less taboo to talk about money and other financial topics that people often feel shame around such as debt,” Woroch says. This, in itself, has multiple benefits.
One, it can help you set expectations around what you can spend, thus avoiding awkward conversations when it’s time to split the bill or pitch in for a common gift, Woroch adds. Two, it can help you find other people going through similar struggles and perhaps learn from them.
Being vocal about your financial boundaries can also inspire others in your network to do the same, normalizing saying “no” to events when they don’t fit your financial goals.
However, this can backfire sometimes. “It can make you feel deprived,” Woroch says. “ If you’re constantly having to decline invites to spend time with family and friends or missing out on fun activities, you can start to feel depressed or burnt out and then give up on your budgeting goals, going on a spending binge.”
That’s why, it’s important to find ways to include fun experiences in your life that don’t necessarily cost a lot of money. “This could be planning a potluck dinner rather than going to an expensive restaurant or setting up a day trip to a nearby town to explore the sites rather than heading out to an all-inclusive resort for the weekend,” Woroch says.
Like any other trend, “loud budgeting” has its benefits and drawbacks, but it’s just a tool and everything depends on how you use it. It can be a great starting point for young adults new to all the personal financial components and terminology like investing, high-yield savings, IRA, etc., Eilat-Raichel says. Trends like these can be a helpful way to get conversations around money started so you can begin your financial journey without feeling ashamed of your current savings situation.
