The psychology of loud budgeting: Why talking about your financial goals helps you to achieve them

Budgeting isn’t something new – taking stock of your financial situation and calculating where your money is going each month isn’t revolutionary, but talking about your money situation and taking stock of your finances openly hasn’t always felt socially acceptable. It is an uncomfortable topic for many and often feels like something that should be hidden, but the trend of loud budgeting is trying to change this.

Originally taking off on TikTok, it’s encouraging change away from social media, educating and inspiring a generation to proudly and vocally take control of their finances, and removing the stigma associated with discussing their finances in the process. 

But what does loud budgeting mean? Why does it work? And how can you start loud budgeting?

What is loud budgeting?

Put simply, loud budgeting means talking about financial boundaries in an open and transparent way with your family and friends. It aims to create an environment and culture that allows people to talk about their money and financial aspirations without embarrassment or shame. 

It encourages people to talk about their monthly income and expenditure, be vocal about their limits and allow people to feel comfortable saying no to an activity if doesn’t fit into their budget. 

Loud Budgeting may not be a new idea, but there is certainly a renewed focus on the concept, so why does it work?

The Psychology of loud budgeting: Why Does It Work

Voicing your intention creates a sense of social accountability. 

If you tell people about your financial situation and say no to plans because you are saving for a holiday or a deposit on a house you are creating an environment where others know your goal and you are more inclined to follow through and stick to your budget. Whoever you have told now knows that you are watching what you are spending and knowing others are aware of your goals can encourage you to stick to them more. 

This translates onto social media too. TikTok has given people a platform to document and share their experiences budgeting and hold themselves accountable for personal challenges. The TikTok #75hard challenge has grown in popularity over the last few years, with more than a billion videos under the hashtag on the platform. People are encouraged to make a 10-week commitment to maintain their diet, stop drinking alcohol and drink more water among other things. The aim is that after the challenge is over these good practices will stick and translate into change beyond a trend.

Both the #75hard challenge and loud budgeting demonstrate the ability to change away from social media but also the power that is knowing other people are following your journey can have on you achieving your goals.

Why has it taken off now: A generational approach to managing money

It isn’t just loud budgeting and the #75hard challenge showing how TikTok has been used to achieve personal goals. ‘No Buy January’ is also a popular movement, encouraging people not to make any non-essential purchases throughout the month. These might be trends, but as we know they can have lasting impacts and also provide an insight into the socio-economic conditions that are motivating spending habits. 

With the cost-of-living crisis and its effects felt across society, there is an extra drive for people to save and watch what they spend. For those who never had any incentive to watch their money before, or had any role models growing up, seeing others loud budget can provide both motivation and prove educational. Social media is playing an increasingly large role in teaching others about managing their finances and helping people hold themselves accountable.

Brittney Reynolds is a great example of this. She used her TikTok account to document her journey of building up a credit card debt of $29,000 to becoming debt-free – the final video she posted paying off the last of the debt amassed 78.6k likes and more than 450k views. 

The drawbacks of being open about money

Loud budgeting is obviously proving an effective way to feel in control of your spending, but it is important to be aware that being vocal about your finances can come with challenges. 

Not everyone will be supportive of your goals or respect your boundaries. While most people in your life might help you to keep on track, there may be some who repeatedly encourage you to stray from your goals. This can be difficult and confrontation is hard, especially when it comes to talking about money and debt. 

This is where establishing your boundaries is important. You may not want to be as vocal about your budget with everyone in your life. And even with those who do know about your financial situation, you can tell them as much or as little as you want. You don’t have to say why you are saving, how much or by when. The key to loud budgeting is being vocal within your boundaries, not anyone else’s.

It is important to note that regardless of this, you should always be careful about whom you share your personal information with, especially details about your finances. Whether that be with people you talk to in real life or on social media, taking part in loud budgeting shouldn’t make you vulnerable to fraud or scammers. 

Top Tips: How to loud budget

The best place to start with loud budgeting is to have a budget, that might sound obvious given its name, but knowing your income and expenditure and what your financial goals are is key to making this work. Whether you prefer pen and paper, a spreadsheet, or an online tool like IE Hub, establishing a budget and your financial boundaries is essential. 

Work out your monthly income and expenditure, and what you have planned in the next few weeks that is going to cost you money before you consider your financial goals. Maybe it’s a house deposit, or a holiday or perhaps it’s paying off credit card debt. No matter the reason, figure out how much you can afford to put towards this goal each month without socially isolating yourself.  

Loud budgeting is about creating an environment where you feel comfortable to discuss your finances, and comfort looks different to everyone. The key things to remember are:

• Set yourself a budget using whatever method works best for you. Know your income and outgoings and set your goals.
• Establish how much information you want to share with other people and who this includes. Be vocal but make sure you aren’t putting yourself at risk.
• Create a culture where discussing money and budgeting isn’t stigmatised or shameful. Embrace saying no if things cost too much and don’t fit into your plan. 

Used well, loud budgeting can have a butterfly effect, helping create a society where we are more accepting of tricky finances, and where discussing budgeting isn’t deemed shameful. But it is also about your own personal goals and helping people achieve the financial aims they have in mind. 

No matter what your goals are, loud budgeting is designed to help you succeed and become more confident in your finances. 

Expert/Author:

Tinisha Osu is a Senior Marketing Coordinator at IE Hub, a free, easy-to-use online debt management tool. She graduated from Newcastle University with a Master’s in Psychology and now uses her studies to understand consumer behaviour and our everyday spending habits.