Loud Budgeting: How This Trending Budget Strategy Works

Highlights:

• Loud budgeting is a new trend that focuses on vocalizing your financial goals: what fits into your budget and what doesn't.
• Loud budgeters openly turn down activities that don't fit in their budget and explain their financial goals to friends and family.
• Because of the social nature of loud budgeting, you can work with an accountability partner to keep motivated and committed to your goals.
• The emphasis of loud budgeting is on facilitating open and healthy conversations about money.

When it comes to learning about personal finance, you might not think about TikTok^®. However, a new trend known as loud budgeting has emerged from the social media platform and is helping followers manage their financial boundaries and achieve their long-term financial goals.

What is loud budgeting?

As a financial management strategy, loud budgeting is a relatively simple concept. It involves turning down social opportunities outside of your budget, such as an impromptu dinner or an expensive weekend away. But it goes a step further: You tell people that those activities don't fit into your budget.

In other words, unlike other budgeting techniques that focus purely on managing incomings and outgoings, loud budgeting focuses on the personal aspect of personal finance.

All too often, people know exactly how much money they have to spend, but they struggle to stick to the numbers in their spreadsheets or succumb to peer pressure. Loud budgeting is changing that, one friend group at a time, by making it easier to talk about money.

How to practice loud budgeting effectively

Before you can practice loud budgeting, you'll need to have some clear financial goals. Sit down and work out a simple budget. How much are your bills each month? How much do you want to save? How much do you have left over to spend on fun?

Keep in mind a good budget is one that you can stick to. This means that it needs to be realistic and, when possible, leave room to indulge in hobbies or activities, like going to the gym.

You can use a budgeting app to help you keep track of your spending, or take advantage of the tracking tools in your online banking app, so you can see where your money's going.

Keep track of everything:

• Rent, utilities and other regular expenses
• Fuel and car maintenance costs
• Groceries
• Eating out, takeaway coffees and other small purchases
• Entertainment

You'll be surprised how quickly the small expenses can add up.

When used wisely, you can integrate a credit card into your budget. As long as you pay your balance each month, it can be a useful money management tool. Avoid high interest borrowing, and aim to have a few months of salary saved as an emergency fund to get you through difficult periods and cover unexpected expenses. Combined, these strategies can help you build a sound financial foundation.

Overcoming challenges in loud budgeting

Setting a budget is one thing, but sticking to it isn't always easy. People of all ages may feel some pressure to spend money, as social media presents a skewed idea of a normal lifestyle.

Loud budgeting can help you overcome that by making it easier to talk about money. Instead of feeling like you're 'behind' because you're not doing those things, loud budgeting helps you share your financial goals with others. By speaking up, you may find you encourage others to do the same thing and normalize the idea of taking care of your finances.

It may be easier to stick with loud budgeting if you tell people what you're doing early on and find someone else who wants to do it, too. Teaming up with someone as an accountability partner can help you stick to your goals when the going gets tough.

This is especially true when faced with unexpected expenses and challenges. If you've been diligently saving for a few months and an emergency wipes out half your savings, it's easy to feel demoralized. Having someone to keep you motivated and working toward your goals can help.

Loud budgeting for different life stages

Loud budgeting could work for everyone, whatever stage of life they're in. Students and young professionals can use it to make it easier to turn down those expensive nights out and suggest less expensive activities, therefore staying connected to their friends, without exceeding their limited budgets.

For families and parents, loud budgeting can promote healthy conversations about finances. By sharing your financial goals, and explaining why you're making the decisions you are, you reduce the room for misunderstanding when making money decisions.

Retirees can benefit from loud budgeting, too. Seniors often have fixed incomes, which makes budgeting crucial. Loud budgeting can encourage them to have open discussions about their financial situation with family.

Building a strong financial future with loud budgeting

In short, loud budgeting is all about speaking openly about your finances. Using that as a starting point, and sticking to your goals, can help you on your way to consistently saving money.