Loud budgeting may be Generation Z’s trend du jour, but the roots of this concept run deep. As a method of candidly communicating money concerns and goals, it hits all the right notes for what’s going on today.
Top TikTok creator and comedian Lukas Battle is credited for coining the term in December 2023, and since then it has become part of the lexicon for millions of young Americans who are eager to turn their economic struggles into financial strength.
Here’s what loud budgeting is, and how to do it well.
What Is Loud Budgeting?
At its core, loud budgeting is being outwardly candid about your intentions to live at or beneath your income level and to spend money according to your personal wants and needs.
Rather than project a false image of prosperity by agreeing to purchases and activities that aren’t within your means or interest, you live honestly and with great respect to your limitations and aspirations.
In many ways loud budgeting is the opposite of “quiet luxury,” which was another viral trend. This, though, was an understated way to display wealth with high-quality but clearly very expensive consumer goods.
Giovanna Gonzalez is a personal finance TikToker with almost 200,000 followers, and she’s been using loud budgeting as a strategy to get ahead since before it had a name. She even addressed the idea in her personal finance book “Cultura & Cash: Lessons from the First Gen Mentor for Managing Finances and Cultural Expectations.”
“It’s moving away from telling people, ‘I can’t afford this,’ and adopting more of a ‘I don’t value this enough, that’s not a priority for me, I don’t want to spend money right now,’ approach,” Gonzalez says.
The difference may sound subtle on the surface, but it’s a more empowering twist.
“Instead of shame in not being able to do what other people are doing, you explain that you’re using your money in a way that is aligned with your values,” Gonzalez says.
“I used it a few years ago when I was saving for a sabbatical, traveling the world while I was still young. I knew it would cost me $30,000, so with loud budgeting, I told my two best friends not to invite me on random Vegas trips. I won’t be available because I’m saving money,” she says.
“They were like, OK, good for you. That didn’t stop them from including me in lower cost trips, which was great,” she adds.
What’s Behind the Loud Budgeting Movement
According to Patrick Milas, a senior financial planner at Citizens Bank, the recent interest in loud budgeting makes sense.
“Loud budgeting is a direct response to the current financial landscape,” Milas said in an email.
“From the pressures of consumerism and environmental concerns to the realities of inflation, a challenging job market, and looming student loans, people are increasingly recognizing the importance of sound financial planning,” he said.
Worries about long-term financial problems are also motivating people to adjust their approaches.
“Many people do not have a firm grasp on how much they need for retirement, whether they are overestimating and are more prepared than they think, or underestimating,” Milas said. “Feeling financially secure is often less about the amount of money you have and more about how you manage it (or choose not to spend it).
Augmenting the trend, Milas said, are perceptions about the overall economic environment. Loud budgeting is a response to this stress, addressing consumers’ need for greater financial transparency.
The concept has particularly appealed to the TikTok generation because it seems different and new. There is a certain shock value in declaring that they will not be splurging even on a small product or service. They’re recognizing they have bigger, more important things on which to spend their money.
Is Loud Budgeting a Trend or a Lasting Shift?
All trends eventually fade, but Milas believes that loud budgeting represents a fundamental change in the way individuals are approaching their personal finances. This shift is driven by a growing awareness of the need for financial literacy and a more proactive engagement with one’s financial future.
There is another payoff, as well: healthy relationships.
“The emphasis on transparency and accountability in personal finance can lead to a more informed and empowered relationship with money,” Milas said. “By openly discussing and strategizing around finances, individuals can demystify complex financial concepts and make more informed decisions.”
Additionally, the focus on long-term planning, particularly around retirement savings and investments, instills a habit of forward-thinking that can significantly impact one’s financial security.
Gonzalez also thinks the loud budgeting movement has legs, but the words probably don’t.
“As a financial educator, I will make sure it’s a lasting shift in the way people talk about money, because I really believe in it, but the TikTok generation love their terms,” she says. “I want my following to understand that this needs to stick around. I want them to embrace it.”
Adopt Loud Budgeting Into Your Lifestyle
Loud budgeting isn’t always about rejecting the things you don’t want to spend money on, but about presenting alternatives.
“It can be easy to be hermit, but there are ways to be with loved ones and socialize without sacrificing your money goals,” Gonzalez says.
For example, if you’ are invited to be a bridesmaid, which can be a major financial endeavor, you can explain that you are focusing on paying down your debt and you would love to celebrate with that person as a wedding guest instead.
“Basically, you’re normalizing these money conversations,” Gonzalez says.
“It has a a positive side effect, which is preserving relationships with people. Many years ago I was part of my friend’s bridal party when I couldn’t afford it and that led to resentment. We’re no longer friends. So, make it clear. It’s not that you don’t want to hang out with the other person, but its not in your budget,” she says.
Adhere to rules of sound loud budgeting, too, Milas said. In addition to having open conversations with certain people, make informed decisions and plan meticulously. His suggestions:
- Develop a budget. Take honest stock of your finances and make a spending and savings plan to achieve what you want. Create small, attainable goals by the day, week, month or longer to help you stick with your plan. This could be building an emergency fund, saving in a health savings account or getting in the habit of saving every month.
- Seek professional help. You may be better off meeting with a qualified, neutral person.
- Trust your gut. Even when you’re committed to loud budgeting, saying no can be tough. “In these situations, ask, ‘Does this make sense in the long run or will I regret it when the bill comes?,’” Milas said. “Remember that sticking to your plan helps build confidence that you are on the right path.”
- Discuss your financial plans. Once you have a clear sense of your financial limitations and goals, you may be better prepared to discuss your boundaries with others and articulate your reasons and intentions.
Finally, Know How Loud Is Too Loud
Not everybody needs to know about your money decisions. You may want to shout to the world that you are spending only according to your values, but be careful.
“You definitely don’t want to sound like you are judging other people for their financial choices,” Gonzalez says. “Don’t say, ‘That’s stupid, no, of course I’m not going to spend money on that.’”
Nor do you want a future employer or potential romantic partner to know that you’re in financial trouble right off the bat, if that’s the case. And though you may want to declare your newfound commitment to living within your means on social media, understand what’s at stake.
“When you put yourself out there in that way, the internet can be cruel, brutal.” Gonzalez says. “Keep your account private if you can’t handle criticism.”
Milas agrees. “In the context of financial transparency and loud budgeting, finding the right volume for discussing financial matters is crucial,” he said. “While openness and honesty about financial concerns and constraints are vital, there’s a fine line between being constructively candid and oversharing.”