If You Aren’t ‘Loud Budgeting,’ Are You Even Budgeting Right? -- MarketWatch

Press Release from Financial Wellness Strategies

Feb. 12, 2024

by Alisa Wolfson

TikTok might not be the first place that comes to mind when you think about finances, but it's got millions of creators offering up thoughts — some questionable, some good — on the topic. One that's trending now is the concept of "loud budgeting." Though it seems to have initially started as a joke (see this Lukas Battle post, which has over 200,000 likes), "loud budgeting" is garnering plenty of buzz now.

It's an approach to personal finance that involves creating a budget and communicating it (loudly) to help you commit to it. Here's how it might work: Let's say you're invited to a dinner (that you could go to) but choose not to go to because you choose to spend your money on other things; instead of making an excuse to hide why you're not going to dinner, you would decline the invitation by saying that it's not in your budget, explains Bobbi Rebell, founder of Financial Wellness Strategies.

In other words, "It's essentially permission to decline an invitation that has a price tag attached, with no more reason than wanting to save the money for something else," says certified financial planner Kenneth Robinson at Practical Financial Planning.

Battle jokes that loud budgeting is the opposite of "quiet luxury," a term that became popular last year for referencing understated elegance and refined consumption. "If you know any rich people, you know that they hate spending money, so it's almost more chic, more stylish, more of a flex," Battle jokes in the TikTok video. "It's not ‘I don't have enough,' it's ‘I don't want to spend."

But does it work? Pros have mixed reviews. Rebell says it can be effective for some people. "If you were not loud budgeting, you might go and blow your budget, or you would decline but make up an excuse like a conflict or say you didn't feel well. This way you're making your choice public and making the statement that you are proud and not in any way hiding that this is not where you're spending your money," says Rebell.

Certified financial planner Marguerita Cheng at Blue Ocean Global Wealth also says there could be value in the trend. "Personal finance is just that, personal. I think there is value in communicating why you're being more intentional with your spending and there's also an aspect of accountability," says Cheng.

Others aren't so sure its very effective. "The idea seems to be that by making your goals public, you're more likely to stick to them. Personally, I find this to be a bit of a social media gimmick. I'm all for individuals remaining disciplined in their savings and spending habits. However I question whether or not making your intentions public via social media adds any real value," certified financial planner Joe Favorito at Landmark Wealth Management says.

And Robinson, who is the author of "Don't Make a Budget: Why It's So Hard to Save Money and What to Do About It" says, "It's not important to be transparent about spending habits. It's important to set boundaries and not let others, including your friends, violate them." He adds: "The idea of loud budgeting emphasizes the importance of spending with intention, which is the opposite of mindless spending. To me, that's where the value is," says Robinson.

There are also plenty of financial tools available online or through financial firms that can provide you with the framework to create a successful financial plan without making your private life public, says Favorito. Working with a financial planner can help you take a holistic view of your finances, including your goals, budget, spending, investments, tax planning and more.