The onset of a new year can often mean adopting new behaviors or hacks to help reach your financial goals — and for some social media users, this year is all about "loud budgeting."
The term went viral on TikTok at the beginning of 2024, with one video racking up over 1.4 million views as of Jan.16. Below, CNBC Select breaks down what you need to know about loud budgeting and how you might be able to use it to reach some of your financial goals.
What is loud budgeting?
Loud budgeting is a money-saving technique that involves declining social opportunities — such as grabbing dinner with a friend or going to that destination wedding — when it puts your financial goals in jeopardy, and telling people that's the reason you aren't going.
When it comes to maintaining our relationships, it can often be difficult to forego the catch-up brunch or the friend group vacation everyone says you'll remember forever when you have money on your mind. So individuals often feel like they have no choice but to begrudgingly accept the invite — and the financial ramifications that may follow.
The idea with loud budgeting is to simply empower more people to be comfortable with speaking up about the financial goals that are most top of mind right now.
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Does loud budgeting work?
Regardless, loud budgeting can help you mentally reframe a missed opportunity into a positive action you're taking to meet a long-term goal. "Prioritizing savings and doing it proudly seems like a great idea," says Elizabeth Schwab, Program Chair of the Behavioral Economics and Business Psychology Divisions at The Chicago School. "It de-stigmatizes what many Americans are feeling and experiencing."
However, Schwab does point out that you need to strike a balance between putting money toward your savings and doing activities that give your life joy. "Declining all of those social invites eventually takes its toll on us socially and emotionally," she says.
Staying organized about your savings and tracking your goals will play a vital role in helping you achieve that balance. For instance, you might consider a savings account that lets you create different "buckets" for different goals. The Wealthfront Cash Account lets you do this by creating categories that represent your goals (like building an emergency fund or saving for a down payment) and then transferring money to each category.
Wealthfront Cash Account
Monthly maintenance fee
None
Minimum deposit to open
$1
Minimum balance
None
Annual Percentage Yield (APY)
5.00% APY
Free ATM network
19,000 free ATMs through Allpoint.
ATM fee reimbursem*nt
None reimbursem*nt for ATMs outside of the network
Overdraft fee
None
Mobile check deposit
Available with the Wealthfront App
Terms apply.
And of course, budgeting apps can be useful tools to help you decide whether you have to decline that coffee invite to reach your goal. CNBC Select has picked Goodbudget as its favorite budging app for beginners, and You Need a Budget (YNAB) is a great choice for users who want more advanced options.
Goodbudget
Cost
Free for 20 total envelopes; $70 annually for unlimited envelopes
Standout features
Allows users to plan their household's spending using the "envelope method," where they allocate a certain amount of their income into categories like groceries, rent and debt payoff. Users are only supposed spend what's in their envelopes and if they go beyond their budget the envelope will show red to indicate that they overspent
Categorizes your expenses
Yes, but users can customize
Links to accounts
No, users manually create "envelopes" and input their transactions
Availability
Has a web-based version, and also offered in both the App Store (for iOS) and on Google Play (for Android)
Security features
256-bit bank grade encryption in a secure data center
Terms apply.
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Bottom line
Loud budgeting may not be a new idea since it simply involves honesty about your financial goals, but it's a reminder to stay committed to those goals. The social media trend can even have positive ripple effects by allowing you to inspire others to do the same. After all, there's strength in numbers and working with someone with similar goals may even make things more fun.
Meet our experts
At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Elizabeth Schwab, the Program Chair of the Behavioral Economics and Business Psychology Divisions at The Chicago School.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products.While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
About Loud Budgeting and Its Impact
Loud budgeting is a money-saving technique that involves declining social opportunities when they put your financial goals in jeopardy and openly communicating the reason for doing so. It has gained attention on social media, particularly on TikTok, with one video amassing over 1.4 million views as of January 16, 2024. The concept aims to empower individuals to prioritize their financial goals and openly communicate their decisions to decline certain social activities.
Elizabeth Schwab, Program Chair of the Behavioral Economics and Business Psychology Divisions at The Chicago School, suggests that loud budgeting can help individuals mentally reframe missed opportunities as positive actions toward long-term financial goals. However, she also emphasizes the importance of striking a balance between saving and engaging in activities that bring joy, as declining all social invites can take a toll on one's social and emotional well-being.
Tools for Effective Loud Budgeting
To effectively implement loud budgeting, staying organized with savings and tracking financial goals is crucial. One approach is to use a savings account that allows the creation of different "buckets" for various financial goals. For instance, the Wealthfront Cash Account enables users to create categories representing different goals, such as building an emergency fund or saving for a down payment, and allocate money to each category.
Additionally, budgeting apps can be valuable tools for decision-making. Goodbudget, for example, allows users to plan their household spending using the "envelope method," where they allocate income into categories like groceries, rent, and debt payoff. This method helps users stay within their budget and track their expenses effectively. On the other hand, You Need a Budget (YNAB) offers more advanced options for users who seek comprehensive budgeting features.
Expert Insights and Considerations
Elizabeth Schwab emphasizes the importance of balancing financial priorities with activities that bring joy. She suggests that declining social invites to prioritize savings should be done thoughtfully to avoid negative social and emotional impacts. It's essential to strike a balance between financial responsibility and enjoying life's experiences.
Concepts Used in the Article
The concepts used in the article relate to public speaking, audience engagement, and speech writing. These concepts are relevant to the discussion of loud budgeting as they involve effective communication and persuasion, which are essential for openly communicating financial decisions and reframing missed opportunities as positive actions toward long-term financial goals.
The concepts of gaining the audience's attention, establishing a connection with the audience, and motivating the audience to listen are crucial in the context of loud budgeting. These concepts align with the idea of openly communicating financial decisions and empowering individuals to prioritize their financial goals while maintaining social connections.
The article also emphasizes the importance of using budgeting tools, such as savings accounts and budgeting apps, to effectively track and manage financial goals. This aligns with the concept of staying organized and utilizing tools for effective communication and decision-making.
Overall, the concepts used in the article highlight the significance of effective communication, audience engagement, and utilizing tools for managing and tracking financial goals, which are essential for implementing loud budgeting effectively.
