Forget Loud Budgeting …. It Won’t Last

Forget Loud Budgeting …. It Won’t Last

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Have you heard of loud budgeting? It’s something that the TikTok generation has picked up.

And like every young generation, they think they are geniuses without realising that what they think is mind-blowingly brilliant has been going on for generations.

I did not know what loud budgeting was until one morning I got up and, whilst on a treadmill having a run, Channel 9 thought it would be a good idea to educate me as if there was nothing more important in the world.

Anyway, the young have a bit of a problem when it comes to saving money for, say, a house deposit, a car, day-to-day expenses or a rainy day. Some will say it has to do with all those fancy breakfasts you get at fancy cafes, but since I usually have breakfast at home, I have no idea what they are talking about.

But the problem is big, which explains the Buy Now Pay Later (BNPL) schemes that have popped up everywhere. Previously, those who use BNPL schemes did not realise that it was a bit one-sided. It all sounded tremendous because lenders said they would not charge interest but then charged outrageous late payment fees and administration fees. The customer ended up paying a crapload, and we have become a bit wiser.

I just think our young live in a different way than we did, and their social pressures are different. But I do also believe that the young don’t quite help themselves either. But then again, I look back at myself when I was a young lad and think the young of today are quite bland. I was always looking for a way to blow up the chemistry lab, for instance, which I do not think my kids would even consider for a second.

Our young today seem to be spending money on all kinds of things. And they like to tell the world about it via social media. Going out, eating out, exclusive brand shopping, etc., our genius young folk have worked out that doing all these things costs money and is probably not good for their financial well-being.

So, they have come up with a trend which in my day would be called sensible. Tik Tok trend calls it loud budgeting.

In a nutshell, loud budgeting is simple. If you get asked by a friend to go out for the night, you say no to them. Then, on social media, you broadcast that you had an invite to go out but turned it down, which saved lots of $$$. In other words, they are telling the world what they are not spending their money on. Apparently, it is meant to be transparent. And by doing this, you spend less, resulting in savings.

Will it work? No idea. But knowing that most of social media is fake – people are known to show things they own when, in fact, they did not own them, to living a life that is not real, to loving people they don’t love to social media advertising selling us things to buy I am not convinced.

In my day, there was no social media. If you knew you had to save for a house deposit and were asked to go out and decided the house was more important, you refused and told the invitee that the house deposit was more important. I don’t remember telephoning my aunty to broadcast it, and even if I did, I am not convinced I would have saved more.

Besides, human beings are emotional beings, and human nature says we want more of something, not less. And that is why I have my doubts. How many times will your social group get excited because you save some $$? After a few times, they are going to think you’re a boring, money-pinching squid.

So, some advice to all those young uns. You do not need to tell the world what you have not spent your money on. There is no need to let the world know you are boring. Or that you are a money pincher.

This is what you need to do.

1.  When you earn money, it goes into a bank account – let’s call it Bank Account 1.

2. From this bank account, transfer a percentage to a different bank account immediately. Let’s call this Savings Account 1. I am not sure what that percentage for you should be. I tell clients to aim for 20%, but if you are just starting out and insist on those fancy breakfasts, it might not be possible.

This is your savings account, whether it is for a house deposit, holiday savings, investments, etc.

3. The best savings account to transfer it to is one that is not available to withdraw online. In other words, make it hard for yourself to withdraw the money because if it is hard, you won’t use it.

4. Now transfer $X from Bank Account 1 into Bank Account 2. This is your personal money spending – your clothes, hair styling, massages, Louis Vuitton shoes, etc. This account is for personal expenses – what you do with it is up to you. But once it is gone, it’s gone until your next payday.

5. Whatever is now left in Bank Account 1, you have to live on. This is rent, rates, food, eating out, fancy breakfasts etc.

If you find that Bank Account 1 is running out of money, you need to limit the fancy breakfasts or reduce the amount you transfer to Bank Account 2. Do not touch Savings Account 1 because you are trying to save, not spend. By trial and error, you will work it out.

If you want to then tell the world you are not spending, you can, but I would not bother. Just look at the savings account and pat yourself on the back. You don’t need social media to tell you that you have been successful. When you see the $$, you know you have been successful.

Savings, which are converted to investments, is step 7 of our 9 steps to building wealth. If you want to know more contact Hitesh at or Ros at or call 07 3161 9548.