Can ‘Loud Budgeting’ Keep Your Spending in Check?
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What is the main topic discussed in this episode?
Here's your Money Briefing for Monday, January 29th. I'm J.R. Whelan for The Wall Street Journal. We're almost a month into the new year. How's that goal of spending less and saving more coming along? To keep their goals in sight, some people are following a money management trend that's gone viral on TikTok, loud budgeting.
What is 'loud budgeting' and why are people trying it in 2024?
If you tell your friend that you can't go out tonight, you are allowed budgeting, maybe saving to move out to a bigger apartment or something like that, then the next time an opportunity arises, your friend could be the one that reminds you, hey, weren't you supposed to be saving for that thing?
We'll talk to Wall Street Journal personal finance reporter Oyin Ededoyin about it after the break.
To manage your finances better, you might think about smart budgeting. But many people are getting the numbers under control by getting in on a TikTok trend called loud budgeting. So how does it work?
How did the TikTok video by Lucas Battle spark the loud budgeting trend?
Wall Street Journal personal finance reporter Oyen Adedoyin joins me to talk about it. So Oyen, how did the term loud budgeting come about and what does it mean?
At the end of December of last year, a young man named Lucas Battle got onto TikTok after a night of spending way too much money than he had intended and was just thinking about what his priorities were going to be for the year of 2024. You know, he was thinking about the two words quiet luxury, which is a trend that. had a lot of popularity in 2023, basically favoring well-made, expensive and understated fashions. And he wanted to flip those two words. So he kind of came up with the words loud budgeting.
It's not I don't have enough. It's I don't want to spend. So 2024 is all about loud budgeting. OK, put that dollar in your pocket.
All right. So rein in the spending.
Why does the 'loud' in loud budgeting mean talking openly about money?
But where does the loud in loud budgeting come from?
Talking about money makes people feel generally uncomfortable. Even though financial advisors and behavioral scientists have been outspoken, no pun intended, about the benefits of talking about your financial situations, people in their everyday lives don't like to talk about it. They'd rather avoid the topic. The loud part of loud budgeting kind of gives people permission to defend themselves by saying, listen, I can't go out to dinner tonight. I just don't have the money.
So loud budgeting is kind of like communicating your financial situation to people.
Exactly. Instead of maybe making up a vague reason in the past why you couldn't commit to an activity or an event, people are just feeling empowered to say, I don't have the money or I'd rather not spend money on this because I want to save for this.
All right. It's a good plan. But does it work?
Well, financial advisors and behavioral scientists actually do see some benefit to this trend. Budgeting is nothing new, of course, but loud budgeting could be a way to encourage people to actually stick to their budgets. If you tell your friends about something that you're going to do, they can serve as an accountability partner and actually hold you to the promise that you're going to make. In this case, if you tell your friend that you can't go out tonight, you are loud budgeting, maybe saving to move out to a bigger apartment or something like that.
Do financial experts say loud budgeting can actually help you stick to a budget?
Then the next time an opportunity arises, your friend could be the one that reminds you, hey, weren't you supposed to be saving for that thing?
Now, you mentioned the man who went on TikTok and talked about loud budgeting. Why is the trend going viral now?
His video really took off. It generated over one million views and more than a thousand comments. People are stitching the video and even contributing their own perspectives to the discourse in ways that they've saved money in recent years. So it really seems to be something that's especially resonating with younger consumers. Part of the reason why it's going viral now is related to the economic stress that Americans have been feeling after periods of high inflation. We've seen increases in credit card debt. We've seen increases in the use of buy now, pay later.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:02–0:25
2
What is 'loud budgeting' and why are people trying it in 2024?
0:25–1:11
3
How did the TikTok video by Lucas Battle spark the loud budgeting trend?
1:11–2:04
4
Why does the 'loud' in loud budgeting mean talking openly about money?
2:04–3:25
5
Do financial experts say loud budgeting can actually help you stick to a budget?
3:25–4:35
6
Why is loud budgeting resonating now — how do inflation and debt play a role?
4:35–6:03
7
How are real people using loud budgeting—examples of canceled trips and DIY parties?
6:03–6:40
8
Can speaking about money with friends build better spending habits long term?
6:40–6:41
Speakers
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