The 2024 Loud Budgeting Trend: What Is It And Do You Care?
Learn if loud budgeting is a smart financial move for you!
Have you heard of loud budgeting? It is a popular financial trend that’s trending on TikTok. It’s all about vocalizing not wanting to spend money.
The (brief) history of the loud budgeting trend
Budgeting out loud became trendy when writer and comedian Lukas Battle uploaded a video introducing loud budgeting as the new trend for 2024. He explains that it isn’t about saying you don’t have the money; instead, it’s about choosing not to spend money on certain things.
The example he gives in his video explains that if a friend invites you out, you could use loud budgeting to tell your friend that you don’t want to spend the gas money to meet up with them.
While this is not a new concept (It just had a new name lol), expressing your financial situation can help you have more conversations around money, hold yourself accountable, and ultimately help you focus on saving rather than spending money.
Battle’s video has over 100,000 likes, but is loud budgeting an effective financial tool?
Will loud budgeting help you spend less and save more?
Loud budgeting can be effective in helping you spend less money in certain moments, especially in social situations. This is because verbalizing your financial situation can support you in setting boundaries.
However, if you’re serious about saving money, it’s best to have a savings plan in place so you know how to redirect the money you’re not spending.
Nonetheless, this money trend can help you achieve your financial goals, especially if you often overspend.
For instance, you can say you’ll skip happy hour to save money for a vacation. Or you can share that you won’t buy the latest iPhone because you prioritize paying off debt.
If you want to improve your financial situation in the long run, it’s best to leverage actionable budgeting practices that will help you do more than just verbalize what you are not spending money on.
Four budgeting methods that do more than just verbalize that you are not spending money!
Here are some of the most common budgeting techniques that have withstood the test of time and trends.
1. The cash envelope method
With the cash-based budgeting approach, for every paycheck, you take out cash for your expenses and allocate each expense into designated envelopes based on categories.
Since you’re using cash to manage your money, you become more conscious of your spending, and it can be easier to follow your budget. However, you don’t have to rely on cash for all of your expenses.
You can use budgeting apps and tools such as a digital envelope system to manage significant bills. Your physical cash can be used for minor expenses and daily transactions such as groceries, eating out, entertainment, clothing, etc.
When you give yourself a certain amount of cash to spend, you lower your risk of overspending.
2. Percentage breakouts
The percentage method helps you to structure your spending and saving by allocating your income towards percentages of:
Needs
Wants
Savings and/or debt repayment
Percentage allocations in your budget can be flexible, and you can make adjustments where needed. For instance, you can allocate less to one category to prioritize another, such as savings or debt repayment.
Common percentage methods include:
The 70-20-10 budget method ( 70% to expenses, 20% to savings, 10% to pay off debt, or charitable donations)
The 50-30-20 method ( 50 % to necessities and essential expenses, 30 % to discretionary spending or non-essential spending, and 20 % to savings)
The 60-30-10 method ( 60 % towards savings, investments, debt repayments, 30% towards essential expenses, and 10% towards fun money)
3. Reverse budgeting
Reverse budgeting follows the “pay yourself first” method. The primary focus is on savings and financial objectives, such as setting aside a specific monthly amount to cover essential bills like mortgage payments and utilities.
Once you’ve met your monthly savings goals and paid your bills within your income, you’re free to allocate the remaining funds as you wish.
4. Zero-based budgeting
Advocated by Dave Ramsey, a zero-based budget is about assigning a purpose to every dollar in your budget.
Rather than having a surplus of $X at the end of the month, you aim to allocate every dollar, leaving $0 remaining (at least on paper).
When crafting your budget, you meticulously account for every expense, ensuring each dollar serves a specific purpose.
While you may not end up with precisely zero dollars remaining due to allocations for various savings funds, the method helps you to be intentional with every dollar spent. It also helps you to have a clear understanding of where your money is going each month.
Budgeting trends are constantly popping up every year. However, no matter the trends, it’s essential that you have practical money management strategies in place that support your lifestyle.
Which type of budgeting will you take on this year? Let us know in the comments.
And if you need more support with budgeting, check out our completely free course on creating the right budget for you!
