Where did Loud Budgeting go?
Back in 2024, around this time, a social media trend called “Loud Budgeting” took off.
Just one year later, I wonder where did all that hype go?
What is Loud Budgeting?
The very simple idea here is to provide a tactic to empower more people to be more comfortable about speaking up about their financial goals – out loud with others – what they are focused on and by doing so, what they are not doing as a consequence.
Here is an example:
Your friend wants to go out to dinner this week but you don’t really want to go because you’re trying to kill your mortgage debt. Sure, you don’t want to miss seeing your friend but at the same time, you don’t want to stretch your wallet too much either; you’d rather stick to your budget in support of your bigger financial goals – and so you tell them “no” or suggest a less expensive alternative.
All well and good.
In an example from TikToker Lucas Battle last year, who has been credited with coining this term, this isn’t just about declining a dinner date but instead adding the important qualifier with a why in your reply:
“Sorry, can’t go out to dinner, I’ve got $7 a day to live on.”
Loud budgeting not only helps describe what personal saving or investing goals might be, but also how you feel about it, in a transparent way.
To frame the emotional side from CNBC:
“The words you use to describe what you feel as it relates to your savings and spending and investing and borrowing and all other forms of financial activity — that’s a different skillset altogether, and one that we are even more lacking in” – CNBC.
Before social media, GenZ might be aware that GenX (my cohort) just said this and still do:
“I can’t afford it”
or
“Sorry, not now, I’ve got other priorities at the moment”.
I’ve used these replies many times in the past and I continue to use them where necessary.
I didn’t call it loud budgeting, then, it was just my way of managing my finite cashflow.
I guess I’ve used this blog in part to share some elements of loud budgeting over the last 15-years but I also confess I never really had a budget per se.
Instead, I’ve always focused on a system that forecasts cashflow and ensures our spending patterns are matching our needs and values. It’s a very simple spreadsheet with essentially four columns:
- Date
- Cashflow in/source
- Cashflow out/source
- Notes/comments/reminders.
That’s it – focusing on things that matter and largely in my control.
Source: Behavior Gap.
Besides, the word “budget” can be a trigger word for many. It could imply to some there are just too many constraints in their life – which could create more anxiety or stress. Trama is not good for the soul.
A year ago I wrote about this concept on my site and why this approach could still work for you:
A year later, although I don’t hear too much about loud budgeting any longer here are some timeless financial tips to manage your cashflow like I do (at any age):
1. Determine money in, money out – write it down
The actual budgeting aspect of loud budgeting or any related TikTok term is not new. Understanding money flowing in vs. money flowing out is what good cashflow principles are based on – which is what I’ve always focused on. So, to get started: create a spreadsheet, open a notepad, find an app or use any other tool you wish. Write it down – how much money comes in and how much money is flowing out; include sources like when, where or to whom.
2. Set priorities
Without an end in mind, how are you going to get to where you want to be???
Take time to write down (ideally separately from your cashflow tool) your financial goals – big, small or anything in between. I believe your goals should be specific, time-bound and measureable.
An example: You want to be mortgage-free, by age 50, in the year 2030.
I had that goal a few years ago before I turned 50.
Use a vision board or anything else to motivate you.
3. Track your spending
Once you understand what money is flowing in and what money is usually flowing out, track it, diligently.
Are there deviations or items that surprise you? Is your spending aligned to your priorities and things you really value?
Take time to examine your most recent bank statements, credit cart statements or use budgeting apps to find out where your money is going each month – and more importantly answer the tough questions like: are you spending more in a specific area than you thought you would? How does that make you feel?
This is not about blame or shame or at fault. Tracking spending is an exercise in raising awareness.
Once you understand where, when and how you are spending your money every month then you can start thinking about potential modifications – which includes better alignment to your priorities. Generally, you’ll have three difference choices to make:
- Earn more
- Spend less
- Cut back non-value added spending.
4. Avoid impulse purchases
Earning more and spending less money in some areas of your life are not always easy solutions but cutting back on areas that are not at all aligned with your priorities and values is usually the best place to start – avoiding impulse purchases is part of that.
Over time, repeating the cycle 1-4 above, I believe your cashflow management activities will improve.
Where did Loud Budgeting go?
Loud budgeting continues to be a concept one year later but with much less social media hype – the sparkle is gone and people have moved on to other new buzzwords. This concept was re-created by a younger generation to help them have some different conservations about money through social media that didn’t exist decades ago – including my cohort.
I believe whatever age you are or generation you’re a part of, TikToker or not, you’re never too young or too old to respectfully decline any invitation for financial reasons that are personal to you.
It’s your life, your money and only you can hold yourself financially accountable.
If putting your financial goals on social media helps you communicate with others – it helps you be accountable to you – go for it.
Mark
Related Reading:
This is our Financial Independence Budget – including what we intend to spend in 2025.
Mark wondering if you’ve ever extrapolated this further by flipping it or looking at unconventional case studies for fixed income in your or your cashflows and portfolios site. Instead of perhaps sticking to a safe withdrawal rule of 3 or 4 percent someone does 6% with a lot less capitol. Hear me out on this.
I recently spoke to a gentleman over coffee who is retired and has been for a while (12 years). We were chatting about safe withdrawal rates and the 4% rule and a 1 MIL base and he laughed at me and said he has the following
1 year emergency fund (never had to touch even in the lost decade)
started with 600,000k in dividend paying funds (ENB, EIT, BCE, CPX, FTS, BNS, BMO, RBC, CU which average ~6% (420K in TFSA and 180K in LIF). He drew down his RSP to add funds to his TFSA and it has been growing yearly with share appreciation
Average CPP at $800 per month before taxes
OAS at $800 per month before taxes
No mortgage but a budget of 31K he spends yearly covering all his spending
He also said he spends around 10K a year in travel and misc and puts another 5 plus K (min is always 5k) away per year in his 2nd TFSA for things like a new vehicle as well as long term savings of which he bought a new car in 2020.
He says he hasn’t had to touch his capitol but has had to change out 1 dividend payer due to a dividend cut yet he is able to survive and is actually building his second TFSA and increasing his wealth.
This may be an option for your readers to comment/consider with advice from a financial planner of course as it is a lot less capitol to acquire. Let me know your thoughts
Great stuff, Lou.
Happy to consider…
So, your general thinking is:
– $1M portfolio, all dividend stocks, etc. (i.e., ENB, EIT, BCE, CPX, FTS, BNS, BMO, RBC, CU which average ~6% returns) (a mix of RIF, LIF and the rest about $420K in TFSA).
-Average CPP at $800
-Average/MAX OAS
No mortgage 🙂
If he has a budget of $31k per year – with $1M portfolio, I know what he was laughing (all the way to the bank. 🙂
In this case study, your friend is likely to a. meet his spending needs and b. have a HUGE estate.
I would be happy to demonstrate if you underspend in retirement, i.e., more cashflow coming in. vs. not spending to any available limit then estate value grows.
I will give this a consideration for sure, Lou since underspending in retirement is not always great either – I see that from time to time and hope to avoid it myself!!
Mark
I have always liked money management. First it was in a blue lined ledger, then for a short time a spreadsheet.
But then I bought Quicken and have used it for well over 20 years. We have about 30 spending and income categories and at the end of each year I add a column to a spreadsheet with the report for the year. I can see on one line for example how much we spent each year on groceries, etc. Never had a budget, but always tracked where everything came from and went. Interesting to see how spending changes over time.
Very smart, but you certainly know where your money is going and to me, that cashflow management principle in understanding money in + money out is key.
It will be interesting for us to see where we our spending patterns might change over time too!
Mark
Growing up poor, I have always had a problem parting with my hard earned money. I just don’t get jazzed buying something expensive. Instead, I’m more excited when I find something I want or need on sale. I’m always looking for a bargain, whether it’s restaurant discounts (prix fixe) or happy hour deals, last minute travel deals, flights/hotels using points, etc. My husband is the same, his parents didn’t have money when he was a kid, so he is frugal too.
We never really kept a budget. Instead, we made sure to max out our savings – max RRSP, TFSAs etc. I also read The Wealthy Barber and used that as a starting point. I have always paid myself first, buying my first RRSP GIC when I was in University because my scholarship was extra money since I was also working at the same time. Back then 6% interest seemed pretty good!
As salaries increased, we didn’t have lifestyle creep. Our kids always had what they needed but nothing extravagant. If they wanted the latest I-phone, expensive jeans or shoes, they had to earn money to get them because I wouldn’t buy those things for myself! All our excess money was used to pay chunks off our mortgage annually so it was gone in our 40s. We just kept socking away money so we could pay for our kids education (RESPs) and save more for retirement.
Only when I thought about retiring early did I sit down and estimate our budget. I grabbed an excel template and filled in the numbers based on our bills and credit card statements. Up to that point, I really didn’t know what we spent, it didn’t matter because we always had enough. I’ve done that for the last few years so we could plan our retirement spending properly and review it once a year to check in.
Now that I’m retired it’s a bit trickier. I have buckets of money so I can track things. Our day to day spending accounts are separate from a pot of money for our emergency fund, and another pot of money I hold out for our tax bill, a third for our kids university. Everything else gets invested (equities and some in money markets as a 2 year cash cushion). Maybe there is an easier way, but our finances are complicated so this is working for me so far!
The key has always been simple. Spend less than you earn, save and invest it. Avoid lifestyle creep. Now I’m having to get comfortable spending our money, that is really the hardest part.
Great insights and a journey, Sandra.
“Only when I thought about retiring early did I sit down and estimate our budget.”
Yup. I don’t of many folks that can start their retirement income planning without knowing what they will spend in retirement.
I’m not in retirement yet, not even semi-retirement until later this year, but we keep our money buckets simple as you know:
1. Daily chequing/saving
2. Emergency fund just in case for #1!
3. Investments with some cash/cash equivalenets, etc.
That’s it. Super simple.
I will keep you posted on my own spending plans but this is our starting point sometime in 2025:
https://www.myownadvisor.ca/financial-independence-budget/
All my best,
Mark
Luckily I have been a saver all of my life starting with Canada Savings Bonds deducted from my pay cheque. After reading The Wealthy Barber, I started paying attention to the process of paying yourself first and setting that money aside. Then I started buying GICs. It was a long time before I was investing in bank mutual funds, then the Couch Potato. My investing knowledge has expanded significantly from those days but I still keep a spreadsheet of my bank balances and another for my expenses. I compare this to the previous year’s one and see if I went astray so I can reel myself back in. A comfortable financial life, without much stress, is worth its weight in gold. At all times of your life, especially in retirement.
Nice, Jan.
Ya, that Wealthy Barber book was the real start of my financial eduction in my mid-teens in 1989-ish. My finanical passion started from there really and it’s stayed with me for about 35 years. 🙂 Time flies when you’re having fun.
Any big spending plans for you in 2025?
Mark
We kept track of expenses against a monthly budget and over a few years we were able to refine the budget to fairly accurately reflect actual outgoings. We carried this process forward into retirement and we evolved our working life budget into a retirement budget.
We found that after a few years we were becoming lazy in our recording, “his miscellaneous ” was almost as big as the “her miscellaneous ” category, totals were right but we couldn’t really analyze spending patterns.
We don’t do too much to track spending now, we just monitor the day to day bank accounts and look for major variance to signal that we need to go back to watching what we spend.
Great to know, Richard. We have a big of a budget for Financial Independence since too much spending, too early, could be an issue for us later in life but we also have plans to dial-up spending and dial-back spending as needed to.
We’re no longer saving for retirement really, just buying the odd stocks or ETFs when opportunities strike – otherwise raising more cash/cash equivalents in 2025 is our main plan as we both transition from full-time work to part-time.
Mark
30 years ago when money was tight, we used envelopes to divide up our paycheque to ensure all the bills got paid and we didn’t overspend what was left over. Some times there was none left over. We tracked it all in a blueline ledger and eventually an exel spreadsheet.
Fast forward to today. Retired 2.5 years ago and we still sit down the first of every month and enter our spending in the spreadsheet.
We like knowing where our hardsaved money goes so our retirement stays on track.
Great stuff, Carl re: you continue to “sit down” and manage where your hardearned money is going.
Any big plan for you in retirement in 2025?
Mark
LOUD Budgeting!
I don’t mind sharing how I budget but telling people the exactitudes of my budget is a bit to personal/revealing.
When you are starting out your financial resources are fairly straight forward – you work, you get paid. Fairly simple to look at the bottom line (net pay) and figure put how much you have. Even then come April 30th (income tax filing deadline) you could get a positive feedback or a negative (you owe them more) feedback.
The actual budget is what do you spend your hard earned dinaro on especially in your earlier years. Some things are fairly simple. Rent/mortgage are usually fairly straightforward. If you own property you will have some taxes and sooner or later some maintenance costs on that (do you need to cut the lawn?). Yes, you do need to budget for maintenance – just changed my hot water tank. Hydro, communications (anything associated with telephone or internet).
After that comes the trickier part. Do you buy/lease/rent a car? Insurance for yourself, especially if you have a family. Insurance on the house/car How much do you allocate to groceries, clothes (no nudists camps up here in the winter), travel, gifts, entertainment (restaurants, movies).
The possibilities to spend are numerous.
You have to decide what is essential and what is nice but easily curtailed That is the tricky part.
Then you do really need to have a basic tracking system to see how much and where you are spending those hard earned dinaro. Only then can you actually “see” where the money is being spent.
Set up my spending budget on the K.I.S.S. principal. I don’t need to know how much I spent in each store, just how much I spent on groceries as an example.
RICARDO
Ya, I’ve found after talking with literally thousands of DIY investors – there is no right or wrong way to manage your personal finances but I do find, more often than not, the most successful ones understand cashflow management very well and are therefore able to more accurately forecast expenses near-term and longer-term.
Eventually, some of those folks get the point whereby they really don’t care = they have “enough” and are able to manage their money with ease.
Mark