What is 'loud budgeting' and can it help you save money? The pros and cons
Money has traditionally been a taboo topic, with most people reluctant to share details of their financial lives. But the recent trend of “loud budgeting” takes a different spin, with individuals shining some public light on their finances in hopes of getting them in order.
The trend has become popular on TikTok and other social-media channels, especially among young adults. A frank, open discussion can result in new strategies and tips to embrace, the adoption of helpful behaviors, worthwhile feedback and more resolve to achieve financial goals. However, there also are potential dangers to heed.
“Loud budgeting is all about being transparent with others so they can support you and hold you accountable,” wrote Kris Batch, a senior vice president at UMB Bank, in a recent commentary. “Similar to having a workout buddy who is reminding you to get out the door and to the gym, loud budgeting gives you accountability with confidence.”
It also involves articulating personal values and embracing what you consider to be important. For example, Batch said, rather than spend $50 on a friend’s birthday cake, you might announce you will bake a cake instead. Or instead of buying a new book, you could check one out from the library for free and tell your friends what you're doing with the $20 saved.
Thinking before you spend
Loud-budgeting topics can center around fairly simple decisions, and a lot of it focuses on pausing to explain the trade-offs you're facing in spending your money.
But there are caveats. As you might be spending a lot of time online, Batch cautions against paying too much attention to advertisements that show up on many social media sites, and she warns against heeding too many product recommendations from various financial influencers who make money by encouraging you to spend it. Many influencers “are paid to show off their shopping hauls and products,” she said.
Loud budgeting often involves sticking to a spending plan while seeking ways to economize. Some of Batch's suggestions include visiting a library instead of buying books and packing lunches instead of eating out. You also might want to buy more generic products and even share clothes and other belongings with friends, she added.
Online alerts can help
Batch also suggests corralling your bank as a type of accountability partner by setting up mobile alerts that can notify you of large transactions, unusual activity or changes in personal information.
Bankrate.com lists several such alerts to consider. One involves setting up notifications if your balance drops below a predetermined level, such as $20, to avoid possible overdraft fees. Others can inform you of large payments as well as ATM withdrawals, and you can sign up to be notified when large recurring bills are coming due. That's in addition to notices informing you when your password or other personal information has been changed, with the aim of avoiding identity theft.
With loud budgeting, you also want to know how to prepare and stick to a budget. Bankrate.com offers five such suggestions for drawing up a budget.
Vanessa Alfaro, regional sales leader at OneAZ Credit Union, recommends people use the 50/30/20 budgeting method, where you break your expenses into three categories, with 50% going to meet needs such as rent, utilities and groceries, 30% for wants and 20% for savings. “This rule works extremely well while providing the opportunity to save for emergencies and pay down debt,” she said.
Be careful not to reveal too much
Any discussion of loud budgeting should be accompanied by warnings — not just about believing feedback from strangers who might not be trustworthy or reliable but also about revealing too much personal information through social media channels.
To reduce the chances of falling victim to an identity theft scam, it’s smart to heed the usual precautions such as using strong, unique user names and passwords. Also, try not to share sensitive details such as your full name, date and city of birth or mother’s maiden name. This also applies to sharing Social Security numbers or details from credit or debit cards or even paychecks.
"Sharing excessive details about one’s income, investments or assets could make individuals vulnerable to targeted scams or even put them in danger,” Alfaro said. With some information to go on, phishing scammers might impersonate a trusted source to get you to reveal more, she added.
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Even information that seems innocent could be used by scammers against you or, at a minimum, by marketers trying to sell something you don’t need. This can include the names of high schools or colleges attended, anniversary dates, your relationship status, the types and names of pets you own and even the make and model of your vehicle.
If in doubt, communicate in general terms without revealing many specifics. Identity Guard offers some helpful tips to minimize social-media risks.
Reach the writer at russ.wiles@arizonarepublic.com
This article originally appeared on Arizona Republic: Sharing your finances on TikTok? It's a thing: Loud budgeting
