Let’s not get too carried away: Loud budgeting is not all that new … and it’s not all that loud. It’s easiest to explain loud budgeting by saying what it’s not. Loud budgeting is the opposite of “quiet luxury,” in which the idea is: “Don’t look wealthy, be wealthy.” (You can read more about this trend in the Kiplinger article Quiet Luxury — What Is It and Could It Help You Manage Your Money?) Loud budgeters are vocal about sticking to their budget.
showed that one in five people say they were raised with a YOLO money motto: “You only live once, so don’t worry about money.” Loud budgeting says boldly that Generation Z is worried about running out of money, and they will make the proud confession that not only can’t they afford luxury, but they choose not to spend their money on those luxuries. They are not slinking around pretending to be rich. They are cool being on a budget and proud of that.Subscribe to Kiplinger’s Personal Finance
Be a smarter, better informed investor.Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail. Profit and prosper with the best of expert advice - straight to your e-mail.Kudos to our youth
Gen Z (ages 18 to 26) have a lot of financial pressure. They have taken on debt for student loans and credit cards. In fact, , from 2022 through 2023, their average debt increased by over 15%, to an average of $29,820 per person.
Their lifestyle is different from my Boomer generations’, where we flew the coop at age 18 and struggled financially on our own. This generation of young people remain largely financially dependent on their parents, with only about 45% of 18- to 34-year-olds describing themselves as completely financially independent from their parents.A found that about 57% of young people ages 18 to 24 are living with their parents. They are also holding off on key milestones, like getting married and having kids. Only 37% of Gen Z feel confident about that they can step into homeownership, according to an .How does this play out for being loud and proud? Rather than overspending and possibly incurring debt, this younger generation is saying that there is no shame in declaring that they can’t afford something. They are throwing off the shackles of buying things for status. They are embracing their budgets and declaring that they can think critically about their spending. They are saying their choices out loud … hence the term “loud budgeting.”
The elephant in the room
Most people growing up were taught that “polite people don’t talk about money.” You may have been swatted by your mom as a kid if you asked someone what something cost. The embarrassment would spread across her face, and you knew you were in trouble. Your mom may have chastised you for “being rude.” This angst-creating situation becomes baggage we often carry into adulthood.In fact, money issues often become the biggest secrets in our relationships. Years ago, I was doing shows with Oprah Winfrey. It was always hard to get people to come on her show to talk about their money problems. Her producers would reach out to potential guests who invariably would say their “money issues were way too private to talk about.” Conversely, Oprah’s producers had no problems booking guests to discuss their sex lives.Even when we booked people to come on the show to discuss money, in so many cases, the couples had not even discussed their financial situations with each other. Again, they said it was way too personal. They had a fear of being judged and often lied to each other about their finances — even about what they earned.I remember asking one dating couple why they felt that having sex was not as personal as discussing their student debt, assets and salaries. Again, they agreed that discussing money was uncomfortable. I was always baffled by that.Blame it on the parents
“” is a real phenomenon that can happen in any socioeconomic strata. It’s a financial spiral that causes people to overspend to try to keep up with others. Financial psychologists say it comes from animal-brain thinking related to the need to belong and impress, to be accepted by the herd.
Many people do find personal finance a challenging topic to discuss. In fact, according to the earlier mentioned Empower survey, 66% of Americans admit that more open conversations about their financial situation would be healthy, but they zip it up and don’t discuss money, even with their loved ones.People would rather discuss other taboo topics, like politics and even death, before discussing their money. This is a legacy handed down through the generations. Most Americans surveyed by Empower say they never learned anything about money in school or at home. More than half said they never talked about money growing up, and one in four learned that it’s not polite to talk about money. This financial illiteracy has disastrous consequences for our younger generations.When couples don’t come clean with each other about their finances, conflicts can arise leading to divorce. Divorce ranks as the second-highest , following the death of a spouse. It’s interesting that financial arguments can occur whether the couples have a lot of money or not.In fact, until I created the topic of teaching kids about money in the 1980s, the topic did not exist.
Your silent budget
So what can you do? Make your own silent budget. It needs to outline your saving goals and how you are going to reach them. Your “recommended” spending will become obvious.This doesn’t have to be thrown in anyone’s face. You do not have to be a martyr. You don’t need to be self-righteous. For instance, if your friends want to go to an expensive restaurant, so be it. Mention that you are on a budget and that your priority is to get together with friends, it’s not about the expensive restaurant. Ask if you can set up a night of pizza at someone’s home, as opposed to all of you going out to a restaurant.Your budget will help you reach financial freedom. Now that’s something to be loud about!
Related Content
- Gen Z Taps TikTok for Financial Advice: What to Do Instead
- 529s: No Longer the Ho-Hum Investing Device for College
- Forget ‘Girl Math’: Handle Your Money Like a Woman
- Finfluencers Are a Rising Trend. But Should You Trust Their Advice?
- Viral TikTok Trend Helped Fuel McDonald’s Second-Quarter Sales
Disclaimer
-
Four Signs That It’s Time to Let Your Financial Adviser Go If your calls aren’t returned and you’re getting charged fees you didn’t expect, among other issues, it’s time to consider your options.
By Heidi Ardis Published
-
Q2 Investing Outlook: Experts Eye Earnings, Rate Cuts & More Inflation, interest rates and corporate earnings will be top of mind for investors in the second quarter.
By Karee Venema Published
-
Four Signs That It’s Time to Let Your Financial Adviser Go If your calls aren’t returned and you’re getting charged fees you didn’t expect, among other issues, it’s time to consider your options.
By Heidi Ardis Published
-
Five Benefits of Slow Travel in Retirement Consider immersing yourself in the culture of a village rather than making a list of all the things you need to do and see within a short period of time.
By Robert Hoffman Published
-
Four Ways to Give Money Tax-Free to Your Kids When You Die If you’d prefer that your estate not pay more taxes than necessary, then these strategies are for you.
By Evan T. Beach, CFP®, AWMA® Published
-
How to Plan for Retirement’s Go-Go, Slow-Go and No-Go Years When retirement planning, it’s best to expect to do the big (and more expensive) stuff early on, when you’re healthier, then slow things down as you get older.
By Scott M. Dougan, RFC, Investment Adviser Published
-
How Life Insurance Can Help You Preserve Your Wealth Life insurance not only provides liquidity for your family to cover immediate expenses after you pass, but it also can minimize estate taxes.
By Justin Stivers, Esq. Published
-
Are Bonds Back? A Fresh Look at Fixed Income in 2024 With interest rates poised to possibly start falling, investors might consider shifting to longer-term fixed-income securities to lock in higher yields.
By Adam Lampe Published
-
Wealth Transfer Is About More Than Just Money Families have many forms of capital beyond their money. Here are five of them, plus ways to easily ‘transfer’ them to younger generations.
By Alex Kirby Published
-
Should You Enroll in Medicare if You Still Have a Job? This question is being asked more than ever these days, so here’s what you can do when it comes to making Medicare decisions while you’re still working.
By Jae W. Oh Published