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Have you noticed your friends being more open about their financial status and voicing how they’re spending or saving their money? Well, it turns out there’s a word for it in the finance world – “loud budgeting.”
Loud budgeting has gone viral with Gen Z, and TikTok creator Lukas Battle says he coined the term, garnering 1.4 million views on his video. Battle explains it as the “opposite of quiet luxury.” The hashtag #loudbudgeting has been trending, with 10.8 million views and counting. One TikToker said, “I pay a lot of money to stay at home, so that’s where I’ll be,” while another says in her video, “It’s about being transparent about your money and what fits and what doesn’t … not folding to peer pressure.”
The concept of loud budgeting encourages people to hold themselves accountable to their financial budgets by saying “no” to some things. This lets people stick to the limits they’ve set for themselves. Or if they’re simply a bit tight on money that month, they won’t feel obliged to attend something out of guilt or for the sake of going. For example, saying to a friend, “I can go out for drinks or dinner, but not both because I’m saving for a trip to Asia.”
While in older generations it was common to split the bill, even if you didn’t have a glass of wine or a beer at dinner (so you inevitably end up paying for everyone else’s drinks), that’s no longer the case with loud budgeting.
“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,” said 30-year-old Tiffany Kohut. “Things can change as long as we have a mindset shift and are actually talking about it.”
The shift in speaking openly with people close to you about your financial situation can help you have a better understanding and relationship with your finances while also letting your friends know why you might be turning down invitations, rather than them thinking that you just don’t want to come.
“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,’” says Derek Ober, a financial advisor with Northwestern Mutual. “Be honest instead of vague.”
So it’s out with the old and in with the new; be outspoken about your financial goals so you’ll be more likely to achieve them.