Does 'Loud Budgeting' Really Work? Here's What We Know

What began as a bit of a joke has become a bonafide method for dealing with the social side of managing money: It's called loud budgeting, and it's taken over the financial side of TikTok. But trends don't always prove useful, and there are many forms this trend can take.

Here's what you need to know about loud budgeting, whether it works, and tips for trying it out.

What is loud budgeting?

Loud budgeting is the practice of being vocal about your financial decisions and needs in the hopes that it will help you achieve your goals. That can look like telling friends that you're on a budget and won't be doing an expensive dinner right now. Or it can be as public as posting TikToks about how you're paying off credit card debt, as has become something of a trend.

Does loud budgeting work?

The approach that loud budgeting takes toward personal finance can absolutely be a key to helping you reach your goals. But how comfortable you'll be enacting this philosophy in your daily life, and how effective it will be, will depend on your personality. And if you're like the 62% of Americans who don't talk about money, it can prove difficult.

For example, if you start telling the people in your life about your budgetary goals, but they don't support you, that probably isn't going to be very useful. However, for those who have a good support system and are willing to potentially get out of their comfort zone to achieve their money goals, then loud budgeting can be a useful approach.

It's also important to note that loud budgeting doesn't have to be all-or-nothing to actually prove useful. For example, if you were to use loud budgeting four days a week to avoid spending money on coffee, but that only worked half the time, that still frees up $40 a month for your savings account simply by talking about your financial needs, assuming $5 per cup. That's $480 per year, if you were to keep it up. (Of course, if buying that coffee makes you happy and fits into your budget, by all means, buy the coffee.)

Three ways to make loud budgeting work for you

Here are a few ways you can refine this method to make it work for your circumstances.

1. Create tailored boundaries

You don't have to publicly broadcast your every purchase to all in order to get value out of loud budgeting. The key here is to find the level of transparency that makes sense for you, given your personality, support system, and goals. So you should carefully consider how you want to set up boundaries before starting loud budgeting. For instance, you may choose to only share generalities (like, "I'm not spending on X this month") or only share with certain people.

2. Consider the avenue

Loud budgeting can be done in your everyday life, but it can also be accomplished via the internet. For example, you may choose to share your financial goals and progress on an online platform. It can help to have an online community of people who are going through the same thing to turn to when things get tough. But online platforms can also open you up to criticism (some warranted, some decidedly not). So be sure you understand the potential pitfalls of each option before committing to one.

3. Get a financial accountability partner

Loud budgeting doesn't have to be reciprocal, but if you can find someone who is willing to act as both a support and share their financial needs at the same time, that's a win-win. Plus, it can be helpful to know that someone understands what you're going through as you make progress. You may consider adding a regular check-in with your accountability partner to your schedule to make sure you're both sticking to the plan.

Talking about money still has a lot of taboo around it. But on top of providing a way to deal with the clash between money and our social lives, loud budgeting has the capacity to change how open people are about their finances. The only question is, how many people will actually use it in their everyday lives?