3 Ways 'Loud Budgeting' Holds You Accountable Like Traditional Budgets Can't
You’re out with friends, and someone suggests a restaurant where an entrée costs as much as your weekly grocery bill. Normally, you’d swallow the cost — not to mention some weird “artisanal” dish — but today, you’re going to do something different. You tell everyone you can’t swing that splurge because you’re saving up for a vacation.
Congratulations, you’ve just enacted “loud budgeting.” This personal finance trend involves communicating openly — or even, yes, “loudly” — about your financial goals and boundaries. Instead of focusing on what you “can’t” afford, loud budgeting reframes your choice as prioritizing other financial goals.
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Many financial advisors are fans of loud budgeting, arguing that it can hold you accountable in ways that traditional budgeting simply can’t. Here’s what two financial experts told MoneyLion.
Loud Budgeting Makes You Accountable to More Than Just Yourself
When your budget and financial goals only live inside a spreadsheet on your laptop, nobody knows when you’ve fallen short of your objectives. Going public with your goals is what Cody Schuiteboer, president and CEO of Best Interest Financial, calls a “profound shift.”
The shift involves making your personal priorities a matter of public record, which can make you feel like you have to live up to expectations.
“If you keep a budget hidden behind a spreadsheet, then failing to meet your financial goals affects only you, and our species is notoriously skilled at forgiving ourselves for things we feel guilty about,” he said. “Letting even a few people know you have set out to save a certain amount of money by a certain date creates a witness pool, and now not achieving your financial goal means explaining it to everyone at every dinner party.”
The way Schuiteboer sees it, your alternatives are either to live with the embarrassment of an unfulfilled goal or to do what you need to do to save money — and save face.
Loud Budgeting Helps You Avoid Lifestyle Creep
Often, you may think of major obstacles to your financial goals as large, seemingly insurmountable factors like a sudden bill. While these things can knock you off track, the subtle pull of lifestyle creep is a significant — and underdiscussed — barrier to success.
Think about it: You get a raise, promotion or even a tax refund, and you feel pressure to upgrade certain areas of your life — even down to ordering pricier coffee and snacks — from people around you. Being loud about your goals and your desire to save money can nip this temptation in the bud because you’ve already told people why you’re not splurging.
“Loud budgeting means you’ve preloaded the explanation,” Schuiteboer said. “Lifestyle creep failure occurs when small lifestyle choices add up, unbeknownst to you, until someone points out that you’re missing a financial goal.”
The best way to avoid missing those financial goals is to be upfront about what you’re willing and able to spend money on. Not only will other people hopefully stop tempting you — or at least become more supportive — you’ll also be more aware of your own spending.
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Loud Budgeting Helps Combat Money Shame
Greg Downs, founder of ClearPath Financial Coaching, gets philosophical about the value of loud budgeting.
“Secrecy is where dysfunction lives,” he said. “The moment you say, ‘I can’t afford that,’ out loud to a friend, you’ve done something a spreadsheet can never make you do: You’ve invited witnesses.”
He likens this process of inviting witnesses into your finances — and destigmatizing not being able to afford an outing or item — to a tenet of recovery called “breaking isolation,” which he adds is “the single most predictive factor in whether someone actually changes their behavior. Money shame thrives in the dark. Daylight kills it.”
When you have a simple, understandable reason for saying no to one thing, like a pricey night out, you’re allowing yourself to say yes to something else, like financial stability — effectively turning a source of shame into a source of pride.
Downs reminds you that, while following the tenets of traditional budgeting is still essential to success, spreadsheets only give you data. They don’t give you a reason to stay strong when your friends are going out for a night on the town you can’t afford. Another person can. A loved one can remind you what you really want out of life and money.
“Every behavioral health field figured this out decades ago: AA, Weight Watchers, smoking cessation groups,” he said. “Personal finance is the last domain still pretending willpower and a Google Sheet are enough.”
The Bottom Line
Loud budgeting is quietly transforming the way people pursue their financial goals. Getting loud and proud about what you really want to spend money on can help you save more, stay accountable and reduce money shame along the way.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
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