Loud budgeting is a personal finance trend that emerged in early 2024. The concept: saying no to social activities that strain your budget so you can focus on your financial goals requires being open with friends and family about your priorities. Financial transparency, both with yourself and your loved ones is important and loud budgeting encourages you to be honest about your savings goals, monthly expenses, and the burden of any larger debts. By having transparent conversations, it becomes easier to resist social pressures to spend, avoid the Fear of Missing Out and prioritise your budget.
What is loud budgeting?
The term "loud budgeting" was coined in December 2023, encouraging a new wave of financial empowerment for 2024. The principle is straightforward: feel confident in saying no to social activities that don’t align with your financial goals, whether it’s dinner with friends, a destination wedding, or a holiday gift exchange.
But loud budgeting is more than just declining invitations. It’s about openly discussing your savings objectives, budgets, and ongoing debts to help your friends and family understand your decisions. These honest conversations may sometimes be tough, but they’re crucial for staying true to your financial goals.
For example:
- You might explain to a university friend that you can't attend their wedding because the associated costs, combined with your student loan repayments, are too overwhelming.
- You might skip a weekend getaway because you’re saving for a deposit for a new home.
- Even small decisions, like opting out of a visit to a friend because you don't want to spend extra on petrol, are part of loud budgeting.
Loud budgeting isn’t just about saying no; it’s about staying committed to your goals. That might mean cutting unnecessary expenses, taking on a side hustle to boost your income.
How to loud budget
Does loud budgeting align with your financial goals? Here are some tips from RCI Bank to help you embrace this trend effectively:
1. Set goals – and stick to them. While saying no is essential, loud budgeting goes beyond staying in on a Saturday night. It requires a solid financial plan, whether you're aiming to pay down debt, build an emergency fund, or save for a significant purchase.
If you're new to budgeting, explore various budgeting methods to find what works best for you. Some popular techniques include:
- The 50-30-20 budget rule
- The 30-day savings rule
2. Have conversations in person when possible. Discussing money can be challenging, but these conversations are a vital part of loud budgeting. Whenever possible, have these talks face-to-face or via video calls, where tone and context are clearer.
For instance, explain to your friends about your new financial goals and how they might affect future plans. Being proactive helps when you need to decline invitations to costly social events.
3. Find other ways to interact with loved ones. Loud budgeting isn’t about giving up your social life, it’s about finding cost-effective alternatives. Here are some ideas:
- Host a game night where everyone brings their own snacks.
- Catch up with friends over a walk in the park instead of drinks at a bar.
- Offer favours like babysitting or lawn mowing in place of expensive gifts.
Get creative and encourage your friends and family to think of fun, budget-friendly activities.
4. Allow little splurges now and then. Budgeting doesn’t mean eliminating all fun. Like dieting, if you deprive yourself completely, you’re more likely to give up. Plan for occasional treats, whether it’s a meal out or a small gift, to keep your budgeting journey sustainable.
Unsure how much you can afford to splurge while staying on track? Use a budget calculator to find the right balance for your financial goals.
Overcoming the discomfort of loud budgeting
Talking about finances can be intimidating, especially with friends and family. You might worry about their reactions or feel uncomfortable sharing details about your financial struggles.
For loud budgeting to succeed, choose your audience wisely. Use this strategy with people who respect your goals and won’t pressure you into overspending. Remember, you don’t owe anyone an explanation. You can share as much or as little as you’re comfortable with, a simple “I’m focused on saving right now” is often enough.
Other ways to avoid overspending
Loud budgeting might not be for everyone. If it doesn’t suit your style, there are other strategies to help you avoid overspending:
- Join other popular trends: Explore other budgeting trends to see what fits your lifestyle.
- Take a media break: Reduce impulse spending by taking a break from social media and ads.
- Shop with cash: Limit your spending by using cash instead of cards.
- Focus on discounts and rewards: Use coupons, discount codes, and rewards programs to lower your expenses.
At RCI Bank, we’re here to support you in achieving your financial goals through saving, our products are designed to help you stay on track.
Be loud and proud about your financial goals
Embracing loud budgeting can empower you to prioritise your financial well-being and foster honest conversations with those around you. By focusing on your goals and making smart financial choices, you’ll free yourself from social pressures and gain control over your spending.
Ready to take the next step in your financial journey? Explore our savings accounts at RCI Bank to help you achieve your goals.
