Loud budgeting is a savings technique that involves openly saying no to things such as social events to save money and being honest about why you're doing so. It could mean saying no to something relatively small, like a meal at a restaurant, or something larger in scale, such as a group vacation.

Loud budgeting was popularized on TikTok at the start of 2024 by content creator Lukas Battle. It quickly went viral and was embraced particularly by Gen Z and Millennial viewers.

How to practice loud budgeting

From having a clear savings plan in mind to using the 24-hour rule to help rein in unessential spending, there can be a lot to consider when practicing loud budgeting. Use the steps below to help you practice loud budgeting with confidence.

Make a budget and set your savings goals

Before you begin the process of loud budgeting the first thing you should do is create a budget and have some clear savings goals in mind. When it comes to making a budget there are a number of budgeting tricks you can use to make it easier such as utilizing budget calculators or creating an emergency savings fund to fall back on.

When making your budget, it is also important to set some savings goals. These could be relatively generic, such as aiming to save a certain amount of money in a set amount of time. They can also be more specific goals, such as saving enough for a vacation or even a mortgage.

Have an accountability partner

Once you start practicing loud budgeting, there will inevitably be times when you are tempted to say yes to expensive things that you should pass on for the sake of your savings. This is where having an accountability partner comes in. In the context of loud budgeting, an accountability partner is someone who can help hold your spending to account. In most cases, an accountability partner will also be practicing loud budgeting.

As well as helping you save, an accountability partner can also help mitigate the “fear of missing out” (FOMO). This is because, as a fellow loud budgeting practitioner, they will be saying no to the same things you are, and you can both arrange alternative social activities together that either cost less or are entirely free.

It is also possible to have multiple accountability partners. The more accountability partners you have, the easier the loud budgeting process will be.

Use the 24-hour rule

Loud budgeting can also be made easier through the use of several saving strategies. One of the most common and effective strategies is the 24-hour rule. In its simplest form, the 24-hour rule works by delaying a potential purchase by a day to give yourself time to consider whether you really need the item or if it would have been an unnecessary impulse buy that would damage your budget.

For example, you may see an expensive shirt in a store that you really like. Instead of buying it straight away, give yourself at least a day to think about how much you really need it. If you decide that you still want to purchase it, there are ways to implement savings strategies. For example, you could balance the budget by selling some clothes that you currently own. Alternatively, you could wait to see if the shirt goes on sale or check if it is stocked elsewhere for a lower price.

Other savings strategies can also be combined with loud budgeting, such as the 50/30/20 rule. The 50/30/20 rule is a useful way to divide up your budget, with each number referring to a percentage of your budget and what it can be spent on. The 50% represents “Needs,” which are living essentials such as rent, bills, and food. The 30% refers to “Wants,” which, while not essential, are still important for a good quality of life, such as vacations, social activities, and subscriptions. Finally, 20% represents “Finances,” which is money that can go into your savings. By dividing your budget like this, it makes it easier to know when to practice loud budgeting and when you can afford to treat yourself socially.

Always be honest

One of the most important parts of loud budgeting is always being honest with your peers about why you are saying no to certain activities. Not only will this help you stick to your savings plan, but it can also help break down the social taboo of saying no to plans “without a good reason.” By normalizing saving, it may also help alter the mindset of those around you to be more savings-oriented.

Seek alternative ways to have fun

Loud budgeting can occasionally be misinterpreted as having to say no to everything. However, this is not the case. A large part of loud budgeting is seeking alternative ways to enjoy an experience that would otherwise be financially costly. For example, instead of paying $60 for a concert ticket, attend a free local show instead. Similarly, instead of going out to eat with friends, invite them over and cook something homemade.

These are just two examples, but there are countless other alternative ways to enjoy yourself with those around you without breaking the bank.

Loud budgeting examples

There are several common scenarios that represent real-life examples of loud budgeting. For instance, you may be invited on an expensive group vacation. You can employ loud budgeting here to either decline the invitation for financial reasons or, alternatively, try to convince your group to vacation locally as a cheaper option rather than traveling abroad.

Another example might be when your friends suggest going out to celebrate a birthday. Instead of spending hundreds of dollars at an expensive city club or bar, you can suggest that someone hosts a party at their house instead. This way, your entire group can have just as much fun for a fraction of the cost.

Holidays like Christmas and Halloween can present challenges for any budget. Spending during these periods can be managed with loud budgeting. For example, opting for a fake Christmas tree instead of buying a real one not only makes that year cheaper, but it also allows you to reuse the tree for many years to come. Loud budgeting examples like this can lead to savings even when you’re not actively trying to budget.

The pros and cons of loud budgeting

Like other saving strategies, there are a number of advantages and disadvantages when it comes to practicing loud budgeting.

Advantages

Some of the main advantages of loud budgeting are as follows:

• Budgeting transparency: Loud budgeting can help create greater financial transparency between you and those you are budgeting with. This increased understanding can result in less pressure to attend costly social events and may even encourage more frequent use of cheaper or free alternatives.

• Save money faster: Being proactive with your loud budgeting can help you save money at a faster rate than without a structured savings strategy.

• Financial self-awareness: By openly discussing what you can and can’t spend money on, loud budgeting fosters a sense of financial self-awareness. Before engaging in loud budgeting, you may have been spending or saving without really considering how much you need to do. Loud budgeting helps establish clearer boundaries in your mind, which can better guide financial decision-making.

Disadvantages

Some of the main disadvantages of loud budgeting are as follows:

• Narrow focus: Since loud budgeting primarily focuses on social activities and events, it can limit its effectiveness. For example, when forming a more general savings plan, loud budgeting may not be as useful. The lines can also become blurred when determining what constitutes a financial "need" versus a "want." For instance, buying food on a lunch break from a store that isn't a grocery store.

• Psychological impact: Adhering to loud budgeting can sometimes mean missing out on events with friends and family, especially when no cheaper or free alternative is available. Over time, this can have a negative psychological impact, particularly on Gen Z and Millennial social media users who may see their non-loud budgeting friends enjoying themselves on platforms like Instagram.

• Oversharing: Frequently saying no to invites for financial reasons might be perceived by some as oversharing personal details. It could also make friends and family unintentionally feel guilty for not always planning events that are financially accessible for everyone.

Does loud budgeting work?

Yes, loud budgeting does work as a method of saving.

In theory as long as outgoings are reduced and there is a clear focus on saving then it is possible loud budgeting can work. It can also help destigmatize a savings mindset among Gen Z and Millennials, helping them reach their saving goals faster. While loud budgeting can be especially useful in the short term—such as saying no to things for a couple of months—eventually, people will want to resume more regular social activities.

This is why, for longer-term savings solutions, it’s better to use a traditional bank like First Merchants. With a First Merchants savings account, you can budget with convenience and security thanks to our financial experts. Reachable by phone or in person, First Merchants bankers are always ready to assist you on your savings journey so you can say yes to things with confidence!