So, you've finally got a budget. Don't be ashamed. Let the world know. And don't worry about being loud about it, either. We're referring to the new trend known as "loud budgeting."
This newest personal finance meme, which went viral on TikTok recently, is all about letting your friends, loved ones, and family members know that you're all in on curbing your spending — and saving more.
That's right, not spending money and nixing impulsive purchases is now the cool thing to do. And using a megaphone to let people know you're cutting back is increasingly seen as a way to improve your relationship with money.
Go 'Loud' Or Go Home
This trend gained traction on Dec. 29, 2023, when a roughly minute-long TikTok video touting loud budgeting from comedian and writer Lukas Battle caught on with the social media crowd. Battle quipped that down deep rich people hate spending money, arguing that it's "more chic, more stylish, more of a flex" for the "average Joe" to keep his money locked away in his wallet.
"Loud budgeting has the same feeling as sneaking candy into a movie theater. You feel like you got away with something," Battle said in his TikTok video gone viral. He added: "You feel like you're on an adventure. You feel like you're coming out of the situation winning."
Quit The Spending Rat Race
Indeed, going public with your budgeting plans is also a way to stop spending just because your next-door neighbor or best friend is living large.
"It's saying, I'm not playing the keeping up with the Joneses game," said John J. (JJ) O'Hare III, partner and wealth manager at O'Hare Wealth Management. "It's a way to transform you from saying 'no' now, so you can say 'yes' more often later. It's really a way to push that delayed gratification."
The big question, of course, is if telling your friends that you're swearing off $16 signature cocktails or booking vacations you can't afford, will really turn you into a full-fledged budgetnista.
Personal finance pros say being vocal about why you're cutting back can reduce peer pressure, create greater financial accountability and lessen your shame about money.
Loud budgeting can also empower you. And it can drive behavior change that can transform a serial spender into a diligent saver.
"It allows you to really take control of your money and (feel a sense of) empowerment related to your finances," said Brian Walsh, a certified financial planner at personal finance site SoFi.
Real-life benefits of loud budgeting vary.
Jumpstart The Budgeting Process With Loud Budgeting
If this viral trend that makes budgeting a hip, socially acceptable thing to do motivates you to create a budget, that's a good start to getting your financial life in order.
It's impossible to know what you're spending, where your money is going, and why you can't save, stay out of debt, or save for retirement, if you don't have a budget, says O'Hare.
"Loud budgeting makes it real," said O'Hare. "That's a huge win for a lot of people, as they now have to nail down their monthly budget and be conscientious about their spending."
Reduce Peer Pressure With Loud Budgeting
Many people spend to keep up with the Joneses or the deep-pocketed one-percenters. They long to live a lavish lifestyle they see in TV ads or on social media. And peer pressure often propels overspending.
Letting your friends know you can't afford a pricey Chateaubriand steak or bottle of 2014 Roederer Cristal Rose Champagne is a way of setting the ground rules before you go out to celebrate a big occasion.
"Being transparent and vocalizing your money decisions with your social group is going to reduce peer pressure," said Walsh.
Boost Accountability With Loud Budgeting
If you keep harping to your friends about not spending, it's likely you will also feel pressure to walk the talk. You can't brag about money while blowing a hole in your budget.
"You create an additional sense of accountability because when you say you're going to do something, you almost feel like you have to," said Walsh. "If you say, 'Hey, I'm going to reduce my spending,' you're less likely to be that guy who orders the most expensive item on the menu when you go out to eat. You're going to feel self-conscious about being hypocritical."
Another benefit is that openly discussing your finances with others also allows you to get support and advice, says Justin Shivers, financial advisor and founding attorney at Stivers Law. "You may receive valuable feedback, tips and advice from others who have similar financial goals or experiences. This can help you make more informed decisions."
Tame Feelings Of Shame
Nobody likes to be the guy who doesn't have the cash to do whatever he wants whenever he wants. But going the loud budgeting rout gives you an excuse ahead of time to turn down a chance to see a sports playoff game where tickets cost $500 or more or go on a high-end trip to the French Riviera with friends.
In short, it makes the typically taboo subject of money just another talking point.
"It reduces the shame that people typically feel when they say, no," said Walsh.
Shivers sees another added benefit: "Removing the stigma associated with budgeting can alleviate stress and anxiety around financial matters."
Drive Behavioral Change
Overspending is a bad habit. Knowing what triggers your impulse purchases is key to keeping you from pulling out a credit card to buy something you can probably do without.
Being vocal about being on a budget can go a long way toward taking a time out before you burn through more cash.
"(Loud budgeting) gives you more awareness of what you're spending on," said O'Hare. "It can drive behavior change. That's the big thing."
Know Potential Cons Of Loud Budgeting
Like any self-improvement endeavor, such as losing weight, starting an exercise regimen or spending less on frivolous stuff, loud budgeting does have potential downsides.
For instance, it's easy to start out gung-ho, only to relapse and fall back to your old poor spending habits, says Walsh.
"It's like working out," said O'Hare. "If it's part of your daily routine, that's great. But how many people are in the gyms in January, only to see them empty in February."
There's also a chance you'll tick off your friends by saying you can't do things due to money over and over again, says O'Hare. "It might cause friction between you and some of your friends," said O'Hare.
And just because the term loud budgeting has gone viral, doesn't necessarily mean you're still managing your money properly.
"What (loud budgeting) doesn't address is what is good budgeting," said O'Hare. "Just being able to meet your monthly needs every month doesn't mean you're saving 15% of your income. It doesn't mean you've got an adequate emergency fund in place. It doesn't mean you're paying down high-interest debt."
The reality is less impressive. "It just kind of means you have a handle on your budget," he said.
