SACRAMENTO, Calif. — ‘Loud budgeting’ is a personal finance trend made popular by social media. The point is to make better choices by sharing your own spending and savings goals.
The name of the game is transparency and self-accountability, but is it right for you and could it put you at risk?
“If you're going to be more accountable, you're more likely to follow through and so maybe you're more likely to achieve your financial goals,” said UC Davis economics professor Derek Stimel.
Loud budgeting can help you resist impulse buys.
“The more you're aware of these things, the more likely you'll make better and more informed decisions,” said Stimel.
Many people are struggling with the high cost of living and feeling the pinch everywhere. For example, the price of eggs and gas is up again and even fast food isn’t as cheap as it used to be. Navigating the price hikes can be daunting.
“We really know that, especially for younger people, their financial literacy rates tend to be low,” said Stimel.
So the ‘loud budgeting’ trend taking off with Gen Z could help them later in life.
“The extent that those younger generations are more, kind of, aware of finances in general, you might help them more towards that path of financial literacy, which is so important for making kind of responsible financial decisions,” said Stimel.
But don’t get carried away and share too much. Remember you’re not only sharing your spending plans with family and friends but strangers online.
“Maybe a better way to go is to start with your friends and family, the people you actually know in your day-to-day life, and kind of see how that works out before you start sharing everything on the internet,” said Stimel.
If loud budgeting isn’t for you, there are other ways to start a budget. Double-check your banking app or website.
For example, Chase automatically tracks your spending for free and helps you create a budget or savings goal. It helps take out the guesswork, which should make it easier to set and keep financial goals.
Another good idea is to look at your bank statements every month. You can also split your paycheck into different accounts – one for checking and one for saving, so every time you get paid you also automatically save money before you’re tempted to spend it.
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