Is Loud Budgeting The New Norm or Just A Phase?

SHORT ANSWER: Loud budgeting is a trend that took root on TikTok as a comedic response to quiet luxury. The concept encourages people to avoid social pressures to spend money by stating they can’t afford such luxury. But it’s unlikely to stick around as friends might stop inviting you to socialize.

Loud budgeting is the newest financial trend on TikTok and came as a response to quiet luxury. What started as a joke has become a real trend as people struggle with skyrocketing inflation and the painful consequences of credit card debt and student loans. It invites people to open up about their budgeting and simply say that they can’t afford to go out instead of making up an excuse or saying they are too busy to join a happy hour or dinner party. But is it just a trend or does it have staying power? Here’s what you can expect. 

What Is Loud Budgeting?

What is loud budgeting? Loud budgeting is a way of sharing your financial goals and declining to spend money on social events. It aims to make talking about money less awkward and uncomfortable by removing barriers to doing so. The more people talk about what they can afford and the luxuries that are out of their reach, the more it can normalize that same lifestyle for others.

The goal with loud budgeting is to live within your means while sharing that you’re doing so instead of making up an excuse for why you can’t take part in a social event or outing. Resisting social pressure can have a big impact on people’s budgets whether they do so by sharing their feelings on the topic verbally or just saying that they won’t be joining in on a social event.

The Loud Budgeting Trend on Tiktok

The loud budgeting trend came from comedian Lukas Battle. He was posting a response to quiet luxury more as a joke than to create a financial trend. However, viewers found the concept interesting and worth trying. That’s because Gen Z and millennials feel like they are drowning in financial woes as inflation keeps increasing faster than their income. And these generations have grown up in the social media era that has fueled the desire for more.

Building the perfect social-media-worthy appearance is important to many people and encourages spending money they might not have. That builds credit card debt, which quickly decreases spending power and makes finances even more challenging.

With loud budgeting, people can open up about their finances and empower others to do the same by removing the concept that doing so is taboo.

Does Loud Budgeting Work?

Whether loud budgeting works or not depends on your personality and comfort level with talking about your finances as well as who is in your social circle.

For example, loud budgeting might not work for you if it makes you feel uncomfortable every time you use finances as an excuse to avoid social settings.

It also might not work for you if you’re in a social circle that does not support your goals. If your friends think you’re being too tight with money because you have a good job and a nice living environment, they might just think you’re being difficult when it comes to planning social gatherings. As a result, you stop getting invitations.

As is true for most financial tactics, loud budgeting works best when you read the situation and use it accordingly. Some scenarios might not lend themselves to loud budgeting. Instead, accept some social invitations, choose what to spend during those outings carefully and decline others, citing your financial needs. Make cutbacks in other areas to enjoy a night out with a friend, such as making coffee at home that week instead of ordering out or canceling a subscription service. 

Loud Budgeting Pros and Cons

As you consider whether loud budgeting might be right for you, consider these pros and cons.

Pros

• Transparency: Social media makes it seem like people are living the perfect life. But loud budgeting makes it clear that not everyone spends their weekends at bars and restaurants or enjoying lavish experiences. Make it clear where you stand financially to allow others to feel empowered to do the same.
• Live within your means: When you get an invitation to eat out or enjoy entertainment, it’s an opportunity to consult your budget and see whether you can afford it. Then you can tell your acquaintances the truth about why you aren’t joining.
• Prioritizing spending: By speaking your financial goals out loud, you can keep your finances prioritized. It keeps you honest about your goals instead of just going with the flow and worrying about reprioritizing your budget later.

Cons

• Too much information: People don’t need to know more about your finances. It might make people feel slightly uncomfortable when you talk about money so openly.
• Hurting people’s feelings: When you tell your best friend that you can’t be in their wedding because the bridesmaid dress is too expensive, it could harm your relationship. Instead, try to encourage a more affordable option or use credit card points or other financial tools to pay for important events or occasions instead of complaining about the price.
• People might stop inviting you to participate: The more you voice your inability to pay for things, the fewer invitations you’ll likely get. Every time you say something is too expensive instead of looking for an alternative or going out and ordering just one drink while your friends get two rounds, you risk missing out on invitations to join in the fun in the future.

How to Practice Loud Budgeting

Start practicing the latest trend in personal finance by using these tenets of loud budgeting in your daily life.

• Voice your financial priorities: While you don’t have to get too detailed or personal when you decline a social invitation, you can say that you’re trying to spend less money or reign in your spending. 
• Surround yourself with like-minded people: If you have a friend who is trying to be more frugal, get them involved. Surrounding yourself with similar people will help you feel supported. Build allies around you in your friends, family and co-workers to make your budgeting goals attainable.
• Set realistic lifestyle goals: Stop trying to keep up with people around you or celebrities you see in the media. Just because someone you know is enjoying a new luxury doesn’t mean you can or should as well. Set your own pace and enjoy what you have already.
• Create a flexible budget: A budget that is too strict about where you spend your entertainment money will likely leave you feeling unhappy. Instead, try to leave room for a few outings or social events each month. Then pick and choose which invitations to accept so that you don’t get the reputation as the person who always declines invitations. When you live by the 50/30/20 rule of budgeting, you have 30% of your budget to spend on wants. That should provide some flexibility to enjoy entertainment on some fronts.
• Find activities that match your lifestyle: Go for a hike, host a social gathering at your home to watch sporting events instead of going in person, look for free concerts in your area and consider whether a local fair or other event might be best for your pocketbook. Instead of being loud about what you can’t afford, offer alternative suggestions for how to get out and enjoy social events that don’t involve a large investment.

Making Financial Conversations Commonplace

While it’s unclear whether loud budgeting is here to stay, it’s a trend that’s allowing for more conversations about smart spending and living within your means. It aims to offset the appearances that social media creates of making people believe that they live a perfect life or enjoy all the finest ways of doing things when in reality they are making tradeoffs to prioritize what matters most to them for their budgets.