How "Loud Budgeting" on TikTok is Tackling Financial Taboos

• "Loud budgeting" gains traction on TikTok as users share financial goals openly, with one video amassing over 1.4 million views by January 16.
• The method involves openly communicating reasons for declining social invitations that may jeopardize financial objectives, fostering confidence in discussing financial goals.
• Elizabeth Schwab, a behavioral economics expert, suggests that vocalizing budgeting efforts can lead to a positive mental shift, turning missed opportunities into steps toward long-term objectives, emphasizing the importance of balance and using tools like budgeting apps to stay organized.

The beginning of a new year sometimes calls for implementing new routines or strategies to assist in achieving your financial objectives; for some social media users, this year is all about "loud budgeting."

In early 2024, the word gained popularity on TikTok, where one video had received over 1.4 million views by of January 16.

What You Need to Know About Loud Budgeting

Loud budgeting is a method of cutting costs that entails telling people why you are unable to attend social events, such dinner with a buddy or that vacation wedding, when they put your financial objectives at risk.

When money is on our minds, it might be hard to say no to the buddy group vacation or the catch-up brunch that everyone claims you'll remember forever when it comes to preserving our connections. People thus frequently feel as though they have no option but to reluctantly accept the invitation and any potential financial consequences.

Loud budgeting simply aims to give more individuals the confidence to talk openly about their most pressing financial objectives at this time.

Does It Work?

However, expressing your budgeting efforts out loud might cause a mental shift that transforms a squandered chance into a move in the right direction toward a long-term objective.

To destigmatize normal financial challenges, Elizabeth Schwab, Program Chair of The Chicago School's Behavioral Economics and Business Psychology Divisions, advises openly prioritizing savings. She does, however, stress the significance of finding a balance, including enjoyable hobbies, and avoiding total isolation from social interactions because prolonged isolation can have negative social and emotional effects.

You will be able to attain that balance if you maintain organization in your savings and goal-tracking. For example, you may think about opening a savings account where you can designate several "buckets" for various objectives. You may accomplish this by putting money into each area that corresponds to your goals (e.g., saving for a down payment or emergency fund) in the Wealthfront Cash Account.

Of course, budgeting applications might be helpful in determining if you need to turn down that coffee invitation in order to accomplish your objective. Goodbudget is CNBC Select's top budgeting tool for novices, and You Need a Budget (YNAB) is an excellent alternative for those seeking more sophisticated features.

Since it just entails being open and honest about your financial objectives, the concept of "loud budgeting" may not be new, but it serves as a reminder to stick with them. Using social media to persuade others to follow suit might even have good knock-on consequences.

Ultimately, there is power in numbers, and collaborating with someone who shares your objectives may even make the process more enjoyable.