It's like budgeting, but loud. It's loud budgeting.
In the latest personal finance trend to go viral on TikTok, young people are encouraging each other to set a budget, and then loudly telling others about it. Essentially, it’s Gen Z’s take on financial accountability.
For Natalie Fischer, a 25-year-old content creator in the greater Seattle area, 2024 is about pumping the breaks on spending. At the beginning of the year, she had a FaceTime call with friends, where they all shared their financial goals and how they were going to achieve them. They took on a “no spend January” and have been gathering for potlucks and self-care days at home rather than going out.
Fischer and her husband, who spent about $20,000 on their wedding last year, also canceled their Orangetheory gym memberships for $208 a month, and she won’t be getting her hair or nails done.
“I feel like the concept of loud budgeting has really come at a time when us regular, middle-class people actually need it,” Fischer said.
After years marked by conspicuous spending — from revenge travel to shelling out thousands on Taylor Swift tickets — some in Gen Z might finally be ready to give their credit cards a breather, putting a social media twist on the classic New Year’s resolution to get one’s finances in order.
In one of the more popular TikToks on the subject, comedy writer Lukas Battle, who claims he coined the term “loud budgeting,” explains that he views it as “the opposite of quiet luxury,” referring to a social media trend last year that involved subtly flexing one’s wealth.
Many people had been practicing loud budgeting for months — they just didn’t have a name for it.
That was the case for Tiffany Kohut, a 30-year-old creative content director based in Greensburg, Pennsylvania, who started a self-imposed spending ban after receiving her federal student loan bill in October. She owed US$55,000, in addition to roughly $30,000 in private loans she had already been paying off and another $17,000 in credit card debt.
When she heard about loud budgeting on TikTok months later, she felt reassured. By not spending on shopping, restaurants and travel, Kohut has been able to bring her credit card debt down to $9,000 and plans to pay it off fully in the next couple of months.
“I think it’s a good way for us to realize we may have dug ourselves into a lot of credit card debt in our 20s and early 30s, but it’s not game over,” she said. “Things can change as long as we have a mindset shift and are actually talking about it.”
OVERSHARING YOUR BUDGET
Setting a personal budget is obviously not a new concept, but the details are generally kept private because talking about money can be awkward. Loud budgeting is trying to turn that on its head, said Yanely Espinal, director of educational outreach at Next Gen Personal Finance, a non-profit financial education advocacy organization.
She argues that oversharing can be a useful tactic for becoming more financially responsible, making it easier to skip an expensive brunch or decline a dinner invitation if your budget is already stretched.
“Loud budgeting reminds everybody, hey, you should have a budget and you should be able to very easily and quickly reference it,’” she said. “We should be able to point to the math of the money and say, this is why I can't do it because I don't have money in this category of my budget, or I already ran out of the money that I put in that category for this month, so I have to wait till next month.”
Derek Ober, financial advisor with Northwestern Mutual, is practicing loud budgeting himself. He recently told a friend having a destination wedding that he couldn’t make it, since he has a second kid on the way and needs to save money.
He recommends loud budgeting to clients as well, because it increases communication and understanding among friends when turning down invitations.
“One of the most respectful ways is to go directly to the source, saying ‘I would love to go but I just can't afford it this year for this specific reason,’” he said. “Be honest instead of vague.”