I’m beginning to check my own sanity as I pull another financial technique from TikTok. Like it or not, these trends reflect what is going on with our younger generation, and we have to listen. The trend I’m talking about now is called loud budgeting.
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.
An Empower survey 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.
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, Experian reports, 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 Pew Research Center study 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 Architectural Digest study.
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
“Keeping up with the Joneses” 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 life stressor, 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
-
ESPN to Acquire NFL Network and RedZone in Exchange for 10% Equity StakeESPN will take control of NFL Network and RedZone, while the NFL secures a 10% stake in ESPN — a move that could change how fans watch football.
-
Stocks Rally on Apple Strength: Stock Market TodayThe iPhone maker will boost its U.S. investment by $100 billion, which sent the Dow Jones stock soaring.
-
I'm an Estate Planning Attorney: These Are the Two Legal Documents Everyone Should HaveEvery adult should have a health care proxy and power of attorney — they save loved ones time, money and stress if a sudden illness or injury leaves you incapacitated.
-
I'm a Financial Professional: Here's My Investing Playbook for Political UncertaintyFor successful long-term investing in a politically charged environment, investors should focus on economic data, have a diversified portfolio and resist reacting to daily headlines.
-
The Truth About the Dark Side of Rooftop Solar PanelsRampant bankruptcies in the solar panel industry have left many consumers with systems that don't work and no way to get them fixed. Worse, they're being hounded to keep paying despite not receiving what they were promised. What can they do?
-
Six Big Beautiful Opportunities: Advisers' Guide to Tax and Client StrategiesHere are several ways financial professionals can help their clients maximize opportunities in the One Big Beautiful Bill Act, which extends key TCJA provisions, introduces increased deductions for people 65 and older and more.
-
Five Ways to Maintain Charitable Giving During Volatile Times: A Giver's GuideWhen the economic outlook is uncertain, charitable giving is even more important — and impactful. You can be strategic by using donor-advised funds, diversifying assets and prioritizing unrestricted gifts.
-
Avoid Medicare's 'Shadow Tax' With This Financial Expert's IRMAA-Busting TipsYou're cruising along in retirement, and then bam: Your Medicare premiums soar because your income crossed the limit. Take a breath. There could be a solution.
-
Grilling Season and ETFs: There's More Than One Way to Cook Up a PortfolioExchange-traded funds come in a multitude of 'flavors' these days, from passive to active to factor-based. Their flexibility is what makes them so delicious.
-
You Don't Want It, But You Should Plan for It Anyway: An Expert Guide to Long-Term CarePlanning for long-term care is crucial to protect your independence, family and financial stability against unexpected health events and rising care costs not covered by standard insurance.
