For example, if you plan to catch up with a friend who suggests going out for a drink, you can suggest that they come over instead to save money. This trend is not about being cheap or missing out on having a good time. It is about setting clear boundaries for both yourself and your surrounding circle about what you will be spending your money on.
This can help you make smarter financial choices and save more money in the long run.
Lukas Battle, a young Tiktoker, is a big advocate for loud budgeting as he starts out the new year. In his now-viral Tiktok video, he explains, “It's not 'I don't have enough,' it's 'I don't want to spend.’”
He points out that having financial transparency or a ‘loud budget’ is not something to be embarrassed about, but something to advocate for in the current economic climate.
Budgeting for beginners
Financial educator Tiffany Aliche spoke to ABC about how loud budgeting is ideal for individuals just starting their financial journey.
She explains, "Budgeting out loud, it's not just the words, but also having these tools in place. It holds you accountable. But also, it allows the people that care about you to also hold you accountable."
Here are the top tips for building up your loud budget on paper before declaring it to the world:
- Start a money list: this list refers to the amount of money coming in, where it comes from, and when.
- Divide your money into spending categories: dividing your money into where it is spent can be helpful to determine what kind of costs you have and where you can cut down on expenses. The best way to do this is by dividing your costs into essentials (debt, bills, groceries, insurance, etc.), savings (investments, savings account, emergency fund, etc.) and non-essential (eating out, clothing, holidays, gifts, etc.)
- Write down your monthly spending: After dividing your money, determine how much is spent each month and see if any gaps or superfluous costs can be cut down.
- Set financial and saving goals: after factoring in essential costs, decide how much you want to save each month and how much should be put into your non-essential budget. These goals can be the foundation for your ‘loud budget’ when you catch up with friends or go shopping.
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