Quiet luxury? That’s so 2023. A new trend is already surging for 2024 and is spreading fast among the personal finance crowd on social media. They call it “loud budgeting.”
It promises a whole bold new approach to living a money-savvy lifestyle. As the name suggests, this isn’t for the faint-hearted. Loud budgeters “flaunt” their frugal lifestyle and encourage their friends to cut back on spending as they do. It’s an activist approach to cost-down living.
The term was reportedly coined by TikTok user Lukas Battle, who implies that loud budgeting involves being vocal with your friends about choosing to live frugally. The term caught on and is transitioning into the mainstream media discourse.
Yet what does it really imply? Not shying away from speaking out about your strict, frugal lifestyle by “broadcasting your spending limits” and being financially upfront with friends.
Battle’s pithy example: “Sorry, can’t go out to dinner. I’ve got $7 a day to live on.”
That’s wearing your budget on your sleeve.
“I decided that this was the year of budgeting,” Battle told Business Insider about the term. “I just feel like there’s not a lot of language for people to use when they don’t want to spend money.”
What are the social implications of loud budgeting? Are there fail-proof methods for reducing spending in core categories like dining out, food, and others? Peering into the weeds with this new trend can help budgeters feel louder and prouder about their spending habits.
Social Anguish
Amid the costs of living and unaffordable housing crises, more young Americans are feeling the pressure to limit spending. Yet spending less is more complex than it seems, largely due to the social nature of consumption. Lifestyle creep is contagious as we take cues from those we interact with.
It has typically been hard to resist, and social media only seems to have exacerbated conscious consumption and spread (FOMO) “fear of missing out” and “keeping up with the Joneses” syndrome in recent years.
Young savers are pushing back against peer pressure. A growing number of millennials and Gen-Z are turning their backs on friends who hurt their wallets.
A 2023 survey by Credit Karma revealed that 47% and 36% of Gen-Z and millennials, respectively, consider ending a friendship due to their friends’ spending habits. Yet, breaking up can be hard to do. A much larger percentage — over 80% of the young survey respondents — admit that hanging out with “spendy friends” has contributed to their debt.
Loud budgeting can outline clear spending boundaries with new acquaintances before they become close friends.
Kelly Klingaman, CFP®, RLP® Founder and Financial Planner, sees an intentional approach to budgeting as the first step to financial success.
“The intentional cash flow plan they create is also extremely personal to their family, and it becomes easy for them to redirect how they spend their money without looking for the approval or reaction from friends and family in their social circles,” says Klingaman.
“They (my clients) learn that they don’t actually care about that sort of outward validation, as long as they’re spending and saving in a way that aligns with what they value most,” she continues. “We work together to clarify what they care most about and help them envision all the possibilities that would define their most fulfilled life.”
Being forthright about budgeting across categories marks out important boundaries for spending.
Eating at Home
Chief among online personal finance topics is the debate over dining out. Some argue that the restaurant scene lampoons savings and others advocate for home-cooked meals. Others view occasional outings as a well-deserved break and encourage the balance of financial prudence and enjoyable social experiences.
Dining out is often one of the largest categories of disposable income. Despite the danger to wallets, Americans have been spending more on restaurants in recent years.
Data from the U.S. Census Bureau shows that in January last year, Americans spent more on dining out than groceries. Consumers spent nearly $90 billion at restaurants that month, a surge of 24% compared to January 2022.
Dining out is not getting cheaper, either. Not only are rising food and operation costs restaurants bumping up menu prices, the widespread specter of “tipflation” has diners forking out even more to staff for basic service when paying the bill.
Other recent surveys show that “menu anxiety” is rising among younger consumers, with over 30% of Gen-Z respondents admitting to feeling overwhelmed by ordering at a restaurant. Unsurprisingly, concerns about overspending are the top driver of dining woes.
There is good news for the loud budgeter: bigger savings can be made by eating at home. By stacking the pantry with affordable and filling foods like oats, potatoes, and eggs, you can limit spending on the grocery bill and stretch your caloric consumption, which helps aid weight loss.
Food is not the only category for budgeters to go bargain hunting.
Discount Fever
For instance, shopping at Costco can significantly benefit young people on a tight food budget by offering a wide range of cost-effective options. Costco consistently offers the best price for dozens of items, making it an ideal choice for budget-conscious individuals.
Items like diapers, batteries, and laundry detergent are cheaper at Costco than at traditional grocery stores. Additionally, the availability of larger quantities can lead to long-term savings as the cost per unit decreases. Such an economical choice is ideal for loud budgeters who want to see how far their dollars can go.
There’s also the option of renting a car through Costco. The program has many benefits, including one-way rental options, 24/7 customer support, and no age limits. For Gen-Z, who show declining rates of car ownership, this could be a cost-effective solution for temporary stints behind the wheel.
More millennials and Gen-Z shoppers are roaming Costco’s aisles, which has historically been a hit with baby boomers.
“We’re seeing more younger people sign up, absolutely,” Costco CEO Craig Jelinek told CNBC in September last year. Jelinek admitted they are tightfisted, even in a discount store, as young newcomers spend less than their older bulk-shopping counterparts.
Even when discounts are available, younger shoppers are weary to spend.
On the surface, loud budgeting may be another phase, but it points to the growing awareness among younger consumers to push back against the culture of rampant consumerism. By being bold about spending limits and living a life that is true to your fiscal instincts, savers can protect their budget integrity and attract friends who share their financial values.
