What is loud budgeting?

Independent

7 days ago

Talking about personal finance is often seen as a taboo which is off-limits, causing many of us to grit our teeth through financial stress while pretending everything is fine. However, a new trend called loud budgeting is challenging this silence and making some noise.
Whether it's skipping an expensive dinner with friends or passing on a weekend trip, loud budgeting encourages open, honest conversations about money with friends and family.
We spoke to Zoe Brett, financial planner at EQ Investors, to break down what loud budgeting really means, why it's catching on, and how you can start using it in your own life.
What is loud budgeting?
'Loud budgeting is really just about being open and honest with people about your finances,' says Brett. 'So, rather than trying to keep up with the Joneses and pay for dinner at that trendy restaurant or the latest outfits, just because your friends or your family are, you are just honest and say actually, I don't want to spend my money on that, I'm budgeting.
'It's about being open and honest with your social circle and saying I don't want to spend this sort of money, I want to be more fiscally responsible.'
Why do you think it's gaining popularity now?
'It's so hard for people to get onto the housing ladder these days, and everyone's been really impacted by the cost of living and are finding it increasingly difficult keeping up with certain lifestyles,' acknowledges Brett. 'Everything just feels very expensive and I think people are just a little bit fed up of feeling broke all the time.'
Brett has also noticed that more people on social media are talking about living pay check to pay check, even people on six-figure salaries.
'I think a lot of people, especially Gen Z, often feel like there is no future for them so they overspend, which has created a little bubble of people who are now trying to unwind that and be a bit more fiscally responsible,' says Brett.
What are the short and long-term benefits of loud budgeting?
One of the immediate benefits of loud budgeting is centred around mental health.
'In the short term, I think that it is actually pretty good for your mental health to stop having to struggle silently to try and keep up with your mates who might be a bit more splurgy than you are,' says Brett. 'Once you just take that first step, it builds momentum. It's the powerhouse of creating your future, and it gives you a bit more hope.'
Then, in the long run this mindset can help build financial security.
'Being conscious about budgeting can help you achieve your goals, like building an emergency fund or saving up for a deposit for a house or a fully funded pension,' says Brett. 'It means you can stop worrying about not having a future, because you'll have built it for yourself.'
Here are some tips for putting this loud budgeting trend into practice…
Rip the band aid off
'The first conversation is always the hardest, and it might be super awkward, but then once you've ripped the band aid off, you will realise that it's not actually as scary as it seemed,' says Brett. 'It's not like you have to divulge all of the intricacies of your financial health to your friends. You can literally just say 'I don't fancy spending the money on that this month'. It can just be a one-line sentence like that, because you don't owe anybody an explanation.'
Speak your goals into existence
Telling your friends about your goals can help keep you accountable.
'When people try to stop smoking or go on a diet, they are much more inclined to stick to [those goals] if somebody else knows that they're doing it, because there's that fear of failure or fear of looking silly – that's just human nature,' says Brett. 'Also, if you've got the right people around you, then they should honour that and support you, and may suggest things that are cheaper.'
Suggest cheaper activities
Be proactive and suggest cheaper activities rather than going along with other people's expensive plans.
'An easy way of implementing loud budgeting is to be on the front foot,' says Brett. 'Rather than waiting for someone to invite you to something, suggest something to them that is within your budget such as drinks in the park, or cooking a meal at home or going to a free gallery.'
Utilise budgeting apps
'Lots of apps will help guide you and prompt you of the sort of things to put into a budget, and will then help calculate it for you,' says Brett. 'On lots of apps you can set goals and it will calculate how much you've got in that savings pot for that particular goal, for example.'
Set finance dates with your partner
'At the start of the the month, set your parameters together and then at the end of the month, review how you did against those parameters,' advises Brett. 'Humans aren't perfect, so it's not about telling people off. It's about saying, OK so we set this budget and didn't stick to it, and analysing what the downfall was and thinking about what you can do differently next month.'
Remember to celebrate your achievements
'It's important to celebrate those little wins along the way, otherwise it can start to feel like a real long slog of sacrificing,' says Brett. 'If you've done amazing and have really under-spent one month, remember to give yourself a pat on the back. Maybe reward yourself with a cheeky Chinese or put the money towards your goals to get there sooner. Celebrating those wins out loud means you get to share a little bit of that joy.'