The onset of a new year can often mean adopting new behaviors or hacks to help reach your financial goals — and for some social media users, this year is all about "loud budgeting."
The term went viral on TikTok at the beginning of 2024, with one video racking up over 1.4 million views as of Jan.16. Below, CNBC Select breaks down what you need to know about loud budgeting and how you might be able to use it to reach some of your financial goals.
What is loud budgeting?
Loud budgeting is a money-saving technique that involves declining social opportunities — such as grabbing dinner with a friend or going to that destination wedding — when it puts your financial goals in jeopardy, and telling people that's the reason you aren't going.
When it comes to maintaining our relationships, it can often be difficult to forego the catch-up brunch or the friend group vacation everyone says you'll remember forever when you have money on your mind. So individuals often feel like they have no choice but to begrudgingly accept the invite — and the financial ramifications that may follow.
The idea with loud budgeting is to simply empower more people to be comfortable with speaking up about the financial goals that are most top of mind right now.
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Does loud budgeting work?
Regardless, loud budgeting can help you mentally reframe a missed opportunity into a positive action you're taking to meet a long-term goal. "Prioritizing savings and doing it proudly seems like a great idea," says Elizabeth Schwab, Program Chair of the Behavioral Economics and Business Psychology Divisions at The Chicago School. "It de-stigmatizes what many Americans are feeling and experiencing."
However, Schwab does point out that you need to strike a balance between putting money toward your savings and doing activities that give your life joy. "Declining all of those social invites eventually takes its toll on us socially and emotionally," she says.
Staying organized about your savings and tracking your goals will play a vital role in helping you achieve that balance. For instance, you might consider a savings account that lets you create different "buckets" for different goals. The Wealthfront Cash Account lets you do this by creating categories that represent your goals (like building an emergency fund or saving for a down payment) and then transferring money to each category.
Wealthfront Cash Account
Annual Percentage Yield (APY)
5.00% APY
Minimum balance
None
Monthly fee
None
Maximum transactions
Unlimited transfers and free same-day withdrawals
FDIC insurance coverage
Up to $8 million
Terms apply.
Pros
- Above-average APY
- No minimum balance or deposit
- No monthly fee
- Unlimited transfers and free same-day withdrawals
- FDIC insurance up to $8 million
Cons
- Limited customer support
And of course, budgeting apps can be useful tools to help you decide whether you have to decline that coffee invite to reach your goal. CNBC Select has picked Goodbudget as its favorite budging app for beginners, and You Need a Budget (YNAB) is a great choice for users who want more advanced options.
Goodbudget
Cost
Free for 20 total envelopes; $8/month (or $70/year) for unlimited envelopes
Standout features
Allows users to plan their household's spending using the "envelope method," where they allocate a certain amount of their income into categories like groceries, rent and debt payoff. Users are only supposed spend what's in their envelopes and if they go beyond their budget the envelope will show red to indicate that they overspent
Categorizes your expenses
Yes, but users can customize
Links to accounts
No, users manually create "envelopes" and input their transactions
Availability
Has a web-based version, and also offered in both the App Store (for iOS) and on Google Play (for Android)
Security features
256-bit bank grade encryption in a secure data center
Terms apply.
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Bottom line
Loud budgeting may not be a new idea since it simply involves honesty about your financial goals, but it's a reminder to stay committed to those goals. The social media trend can even have positive ripple effects by allowing you to inspire others to do the same. After all, there's strength in numbers and working with someone with similar goals may even make things more fun.
Meet our experts
At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Elizabeth Schwab, the Program Chair of the Behavioral Economics and Business Psychology Divisions at The Chicago School.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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