You may have heard of the latest trend in the personal finance space, called loud budgeting. But what exactly is loud budgeting, and why should it matter to you and your personal financial goals? Zoe Brett, Financial Planner at EQ Investors, explains.
Recently, a new money trend has gone viral on TikTok and Instagram. ‘Loud budgeting’ is all about being transparent and explicit about what you are and aren’t willing to spend your money on – with yourself and loved ones.
What is loud budgeting?
Loud budgeting is about sharing your financial goals and setting boundaries around your spending habits with family and your social circle. The idea is that being open and honest about your finances will promote healthier financial decisions and remove the pressure to overspend. It’s a sort of anti-
keeping up with the Joneses approach to building a happier future.
Why can it be difficult to speak about money whether you do or don’t have it?
Speaking about money can feel awkward wherever you are on the wealth spectrum. The truly wealthy often see talking about wealth as classless and being poor is often filled with shame and the feeling of failure. Then there’s everyone in between. Bombarded day in and day out by social media telling them that they need to have this or that to be better or accepted, that they are not good enough if they are not eating here or travelling there.
It seems no matter how much we accumulate we’re told it’s just not enough and we’re not enough. When someone believes this exploitive messaging, it’s tough to face. But for the record, it’s not real, it’s marketing, it’s about making money not you and you are enough!
Could the trend completely change the way Gen Z approaches finances?
In the UK, a third of adults feel too uncomfortable to talk about money with friends, despite 44 per cent regularly worrying about it. In many ways it’s common sense to speak up but in today’s world of immediate gratification and social pressure, it’s fair to say it is a bit on the radical side. It takes strength and confidence to go against the crowd but if you own it then your finances will never be able to own you. That position of power over your
money can change life as you know it forever, whatever generation you belong to. It’s never too late to take control.
How does money affect mental health?
It can be devastating. Money is so intertwined into every aspect of our lives that struggling with it can make you feel that your entire world is crashing down around you and in many ways it is. Overspending on one thing means there’s no money for something else.
Maybe you skip the bills, eat cheap unhealthy food, quit that gym membership, avoid seeing family or friends or work yourself into the ground just trying to keep up. Then there’s the guilt that you’re neglecting things that you know matter resulting in a downward spiral that feels hopeless.
It’s so important to recognise this and act. Loud budgeting is a great way to kick start this recovery and find the mental space to build the life you want for yourself.
Has this trend made finances and money struggles more acceptable to talk about?
Influencers are looked up to by millions, what they say holds weight for those who aspire to be like them. Seeing Influencers get behind good healthy habits can be a game changer. Influencer culture has played a huge role in fuelling the problem of overspending, but it also has the power to be a huge part of the solution.
Why are personal budgeting and money boundaries so important?
Ever looked at your bank balance and asked yourself where all your money went? Bits and bobs add up quickly. A fancy coffee here, new lip stick there might seem small but do that too often and its £100’s before you know it. Setting boundaries within a realistic budget means never having to wonder where your money is disappearing too again. It means taking care of what matters now and for your future.
Its freedom to have an affordable amount of what you want guilt free and the peace of being financially secure.
