What is Loud Budgeting and How Does it Work?

There are many ways to budget. Some budgeting methods might be really useful for you but not for someone else. Along with budgeting methods, there are also budgeting techniques and practices that can help you stay on track with your goals and not overspend.

Loud budgeting is a popular new TikTok trend that helps people be more honest about their finances with friends and family. The goal of loud budgeting is to stay on track and not make unnecessary expenses in an effort to hide your important money goals.

What is Loud Budgeting?

Loud budgeting is a budgeting practice that involves being open with friends and family about what does and doesn’t fit into your budget right now.

The term was born as a comedic response to the term “quiet luxury” by comedian Lukas Battle. The term quiet luxury is a financial lifestyle that involves being quiet or humble about the luxury your wealth can afford. As this term’s opposite, loud budgeting is then a financial lifestyle that involves being loud and open about your budgetary needs. 

For example, if your friends invite you out to dinner Friday night, and your budget doesn’t fit that cost, rather than thinking up an excuse for why you can’t make it, with loud budgeting you would be open and up front with your friends that dinner doesn’t fit in your budget this week and that’s why you can’t go. 

It can be tempting in financial situations like this to not let your friends know the real reason you can’t spend money on dinner or the movies, or to take the financial hit and go anyway rather than be open with your friends about what doesn’t fit into your budget. But loud budgeting is a trend that aims to change that and get rid of the stigma around being open about your financial situation. 

How Loud Budgeting Works

Loud budgeting is a financial practice that involves being more vocal about your budget with others and setting healthy financial boundaries with friends and family. Communication is key in any social setting, and sometimes being loud about your budget is necessary where social expenses are concerned. 

To practice loud budgeting for yourself, 

1. Make a budget.

Start by making a budget you feel good about. Everyone budgets differently, but the main process is relatively similar across the board. Whether you’re using a cash envelope system, a spreadsheet, or a budget app, you’ll want to outline your total monthly income and work that income into budgeting categories like essential expenses vs nonessential expenses.

2. Budget for fun or unexpected expenses.

While you're setting your limits for each budget category, make sure to remember to budget for fun and unexpected expenses too. Whether you’re doing a money savings challenge, building a better credit score, or paying off debts, it’s important to still do things you enjoy to enrich your day-to-day life. 

Sit down with your expenses and outline how you want to spend money on nonessentials each month. Maybe getting a morning coffee is an important part of your morning ritual, or maybe your friends always go to the movies together once a month.

With loud budgeting, you don’t have to sacrifice all the expenses that bring you joy, you just want to be mindful about how they fit in your budget and set boundaries where necessary to prioritize keeping your long and short-term financial goals.

3. Communicate your financial goals.

Loud budgeting isn’t about never going out with friends anymore or never spending money on fun things anymore. Rather, it’s about being openly mindful about how you use your spending money for those budgeting categories and sharing your financial goals with those around you.

For example, maybe you set aside $100 each month to use for something fun. That might be all you need to spend on dinner or movies with friends that month. But, if plans with friends start to go over that set budget, then it’s time to speak up and say, “Sorry, my recreational budget is used up for this month, but we can plan to go out again next month!”

Doing this is much better than not being open with your friends about why you can’t go out again or overspending this budget category rather than sticking to your financial goals that month. 

Examples of Loud Budgeting

As you’ll see with the following loud budgeting examples, the main key to practicing loud budgeting in real life is being open and honest about your finances, while making plans to meet costs that might be socially important. 

For example, if your friends or family members are planning something important with individual costs that go outside your budget, don’t be afraid to communicate that so you can plan to save or work out a new plan together. 

• Your friends invite you out multiple times in one month. You let your friends know your budget doesn’t allow you to go out anymore that month, but you suggest making plans for next month or doing something for free like a movie night at home.
• Your friends ask you out to dinner at an expensive restaurant. You let your friends know that this restaurant doesn’t fit into your eating out budget for that month, but you suggest making dinner plans in advance so you can save up to go there together.
• Your family plans a reunion at an expensive location. You communicate with the reunion coordinator that these travel plans don’t fit into your budget, but suggest either planning the reunion further out so you have time to save or choosing a more affordable location.
• A popular luxury item catches your eye. Before you buy you check your budget and plan to save up for this item rather than spending outside of this month’s allotted spending limits. 

As you can see, loud budgeting isn’t about missing out. You can work with loved ones to make plans you can reasonably afford or make plans further out in the future so you can save up that budget category. 

Utilizing this practice will help you prioritize your budget so you don’t have to sacrifice your monthly and long-term financial goals for the people who care about you and your success.

Benefits of Loud Budgeting

There are so many great benefits to implementing the practice of loud budgeting into your daily life. Primarily this will help you prioritize your money goals and be more honest with your loved ones about your social spending.

Here are some other great benefits you can have by using this method:

• Works with any type of budget you want to use, like the cash envelope system or the 50 30 20 budgeting method
• More honesty between friends and family
• Reframe things you miss into a positive movement toward your financial goals
• Prioritize your financial goals to save money, pay down debts, or stay within a set budget
• Reminds loved ones to be mindful of others’ finances when making plans
• Opportunity to be more creative in making plans that are free or more affordable
• Encourages planning ahead to save up for expenses that don’t fit your budget now
• Promotes healthy conversations about money with the people around you