Loud budgeting is a new financial trend that has found popularity on social media. This is a trend that normalizes conversations around money and fosters authentic discussions. Online, there are many accounts of people finding this method helpful. Many claim that they are able to stick to their budgets because of it, and focus on their personal money goals. So what exactly is it about?
What is loud budgeting?
The loud budgeting trend started from a viral TikTok video in December 2023, posted by comedian Lucas Battle. It quickly received over 1.5 million views and sparked a discussion that quickly took over the mainstream imagination as well. Loud budgeting involves being open about your budget and bringing honesty into the conversation on finances. With loud budgeting, you can say “no” to an expense that you choose not to or cannot afford to spend on. It gives you the power to decide what you do and do not choose to spend on and focus on what areas really matter to you.
This trend also encourages being honest about your future financial goals, so you don’t need to mess up your budget to live up to others’ expectations. It allows you to bring the focus on your own finances, in a way that matters to you. If you’re dealing with debt, this becomes even more important. By prioritizing your expenses appropriately, you will be able to spend on what really benefits your life. This trend helps make being frugal socially acceptable.
Interestingly, previously popular trends like “girl math” and “quiet luxury” were about displaying your wealth and justifying spending decisions. Loud budgeting seems to be a step in the opposite direction.
Why is loud budgeting popular?
Loud budgeting has quickly gained favour, and there are a lot of possible reasons why. For one, the state of the economy has taken a toll on many. The rising inflation and cost of living means that more and more people are feeling the pinch. When everyone’s in the same boat, people are more willing to be open with each other. This transparency can lead to accountability, better conversations and possibly good long-term habits.
Another big component is generational influence. Gen Z finds financial literacy more important than other generations. According to a 2022 survey, 77% of respondents believe saving is important for the future. This trend falls right in line with the interests of this generation. Last but certainly not least, social media is a big reason for the current popularity of loud budgeting. These trends are quite popular on social media and often originate from Gen Z hotspots like TikTok. The nature of social media also makes it easier to share and spread an idea, especially one that has to do with talking about your situation openly and honestly.
Popularity in Canada
Loud budgeting has found popularity in Canada, thanks to the cost of living increasing in many areas. Food prices are up by 4.7% year over year. There is a housing crisis in many major cities, which is expanding to other provinces and cities rapidly.
Canada’s annual inflation rate was up to 3.4%, as of December 2023. In July 2024, it fell to 2.5%, which has been the lowest since March 2021. Another rate cut is anticipated in the future. There is also an overall increase in debt, across demographics – which means that more and more people are facing financial difficulties, irrespective of their socioeconomic background.
Loud budgeting: The good
Loud budgeting has a lot of benefits, especially if it appeals to your personal approach to finances. You’re more likely to stick to your budget goals since you’re publicly accountable. Additionally, since you’re being public and honest, you will also find it easier to say no to things that don’t work for you. It also helps reduce social pressure on spending.
Loud budgeting also increases conversations about money, leading to increased financial literacy and encouraging being mindful of your spending. The element of openness is an encouraging one, coinciding with the larger trend of salary range transparency in job positions.
Overall, loud budgeting can help people feel more in control of their budget, even with factors beyond their control affecting their income and finances, like rising inflation. Consistently sticking to your budget can also help you reach your financial goals in a structured and committed way.
Loud budgeting: The bad
There are some negative aspects to the loud budgeting trend as well. It can lead to comparison, and people who have fewer resources, insufficient funds or systemic barriers may have more financial anxiety by looking at other people’s budgets.
People may not want to share their finances. Like all such trends, it appeals to people who are more comfortable being open about such topics, and quite a few people may not choose to disclose these details so publicly.
As with all social trends, there may be pressure to participate. Often, people may not want to. For instance, both reasons above may exacerbate the pressure and make people feel uncomfortable. In order to stick to your budget, it is, after all, not necessary to be transparent about finances. While it may help you justify your choices, or say no more easily, it should be for the right reasons. If the reason is social acceptance and peer approval, it can quickly get messy.
Tips on loud budgeting
If loud budgeting resonates with you, try to implement these tips to make this a habit in your life, instead of a short-lived trend.
Have clear financial goals
Before you start, you should ideally create a budget. Note down your monthly fixed expenses, savings goals, and other discretionary expenses. Track your spending and actually see where the money is going. You can even track by category and make changes to your spending patterns accordingly if needed. Modify your budget as you figure out what areas need improvement. Treat it like a work in progress, and stay focused on your priorities. You could also use this opportunity to set specific savings goals to work towards, like paying off your debt or saving for a mortgage down payment.
Practice open communication
This trend is based on transparency about your finances. Let your friends and family know that you’re putting this into practice, so they’re not taken by surprise when you decline an invitation. Do explain your decision and objectives. They may even be open to alternative plans that can be more inclusive – you never know till you try!
Of course, you can always participate in the trend on social media, and document your milestones and journey. You may just find that by doing this you gain a sense of accountability and community that helps you stay on track and motivated.
Find affordable alternatives
Set yourself up for success by finding low-cost and affordable alternatives to activities you enjoy. For instance, you could suggest a potluck at home instead of an expensive restaurant. After all, the important thing is to spend time with your friends and family. Many community events, beginner lessons for activities, and outdoor experiences can be budget-friendly.
Key takeaways
Loud budgeting is a financial trend that is all about transparency, and being able to say “no” to an expense that doesn’t fit in your budget. It emphasizes figuring out your financial priorities and being open about them.
It has quickly gained popularity, especially among Gen Z, who are more interested in financial literacy than other generations. This trend is also increasing conversations in the community around personal finance, which is an encouraging sentiment. However, the flip side is that it can lead to comparison, resentment, or increased financial anxiety. If you’re considering loud budgeting, make sure you’re doing it for the right reasons.
To make loud budgeting work for you, have a clear financial plan, communicate openly, and find affordable alternatives to help you stay on track. All these aspects make loud budgeting a powerful tool for reaching financial milestones, like paying off debt. If you’re currently dealing with debt, you can contact one of our trained credit counsellors for advice – they can help you figure out which debt relief strategy could be the right fit for your specific situation.
