I'll be the first to admit that I've resorted to 'doom spending' when life gets rocky, but the new TikTok viral trend of loud budgeting is making me rethink my financial habits. That's right girls — this is an intervention that involves us getting more comfortable talking about money. Now that we've ripped off the band-aid by saying the quiet part out loud, you're probably wondering what the heck loud budgeting is. One thing I can promise is that it doesn't involve screaming at your bank account — at least not anymore.
To help break this trend down and learn how to make it work for you, I spoke with Emily Irwin, Managing Director and Senior Director of Advice at Wells Fargo. Trust me — there's fun, relatable, and actionable tips ahead that'll have you in your loud budgeting bag in no time!
What is loud budgeting?
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Here's a little secret about loud budgeting — it's not really new. Chances are that you've already implemented in your daily life at various points, but called it something different. Irwin said, "Loud budgeting is being completely comfortable with yourself to tell those around you, 'Here's my limitations with my finances.' It's about making purposeful and intentional decisions with your goals. You can always tell people, 'It's not personal. I just need you to respect my decisions [around money].'"
If loud budgeting isn't new, why is it so popular right now?
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Irwin wants you to know that, if done right, loud budgeting isn't seasonal in nature. The reason it's trending is based on a few things in her opinion. She said, "We've seen a number of things affect finances in the past years. For example, inflation has been affecting different consumers and wages may not have been keeping up with cost of living."
She also said millennials are now finding they have to allocate additional funds to other responsibilities and more people are starting to think long-term. "Individuals who are interested in making a big purchase are starting to figure out that they have to either lower their expectations or save more money," she said.
How can I make loud budgeting work for me?
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While she loves seeing more people talk about sharing how they're loud budgeting, Irwin advises against sharing your actual budget sheet with others on the internet for privacy concerns. "The last thing you want to do is trigger someone's financial insecurities or make them think they can target you," she said.
Aside from that, there are several ways to loud budget. "Again, get comfortable about where you want to spend your money and make sure that's tied into your goals. If you want to go out for dinner, tie it to a goal like date night with your partner. You can set allocate funds for one date night per month or whatever your budget allows," Irwin said. "On the other hand, if you know going out for weekly dinner and drinks with your friends or co-workers isn't feasible, ask if you can adjust where you're going. You can also tell your friends or co-workers that you're going to pass on a weekly outing."
What if I'm afraid of being judged about my commitment to loud budgeting?
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The decision to make better financial choices is personal and not intended to hurt anyone's feelings. Irwin suggests that you continue to communicate with those around you so everyone is on the same page. She said, "Money is tied to our interpersonal relationships and can change the narrative of your behavior. You can even make suggestions to your friends about spending time together that doesn't involve spending money. Say 'Instead of going out for cocktails on this day, let's go for a walk in the park' or something along those lines."
Why is is so hard to stick to a budget?
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This is something we've asked ourselves so many times, but Irwin has an amazing answer for how to combat it. She said, "So many people get overwhelmed by their finances — multiple savings accounts or credit cards — but it helps to put things on paper. When you can see and begin to understand where your money is going on a monthly basis, it makes things a little easier."
She suggests that you change the way you look at your fixed expenses (housing, food, etc.,) by asking where you can be a little flexible. "Ask yourself if food includes shopping at Whole Foods and so on and so forth," Irwin said. Simultaneously, Irwin doesn't want you to get caught up in excluding fun things from your budget. It's okay — we're absolutely guilty of thinking that budgeting means we're no longer allowed to have fun.
"Most individuals, myself included, like to be able to have fun — whatever that looks like — and splurge. If we don't build that into our budget, a one-time event can derail our budget. So yes, your budget can include fun stuff," Irwin said. In other words, the no-shopping challenge can make you feel like worse if you decide to buy something based on impulse.
Overall, Irwin said that loud budgeting should be fun. She said, "You should feel empowered to control your financial destiny so you can be confident that you're making decisions you're comfortable with."
How do you feel about loud budgeting? Let us know and subscribe to our newsletter for more friendly tips!
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