MONEY SENSE
LOUD BUDGETING HELPS KEEP LIFE ON TRACK
“Loud budgeting” is about talkin about their financial situation. It removes the stigma of talking about money and can help you stay on track and reach your financial goals sooner. Image credit: ALVARO REYES on Unsplash.
From NEWS CANADA
With the festive season in full swing, get-togethers are amping up. When we are with family and friends, not everyone feels comfortable talking about money, but a new trend is trying to change that.
“Loud budgeting” is gaining traction right now. It’s about breaking that taboo and encouraging people to talk about their financial situations. It removes the stigma of talking about money and can help you stay on track and reach your financial goals sooner.
What is loud budgeting?
It’s all about transparency. This means being honest about your financial situation with yourself and with others. You can openly share your budget, spending limits, and financial goals with friends and family.
It can provide community support and hold you accountable. By discussing your budget openly, you can gain support from others who understand your goals and can help you stay on track. It can also help reduce the pressure of trying to keep up with other people’s spending habits. For example, people might be more understanding if you refuse an invitation to go out to eat or go shopping if they know you’re trying to save or pay your debt.
Find an accountability partner. Partner with someone who has similar financial goals to keep each other motivated. This is the same as finding a gym partner. Some people may find it easier to stick to a plan when they’re doing it with someone else.
It can be empowering. It shifts the narrative from “I can’t afford this” to “I choose not to spend on this because it’s not a priority for me”. This empowers you to make financial decisions based on your values.
Set clear goals. Define what you want to achieve with your budget before you communicate these goals openly. Financial goals can include paying off debt, saving for a home or saving for a trip of a lifetime.
Start small. Discuss your budget with close friends or family members. This approach may be less intimidating.
Some people share their budgeting journey on platforms like TikTok or Instagram to connect with others that practise loud budgeting. If this interests you, remember to never share any personal and banking information that could put you at risk of fraud.
Get started with a budget. When it comes to budgeting, it’s important to be aware of the amount you bring home after taxes, the amount you spend on fixed expenses and how much you put into savings and investments.
Set financial goals. Ensure your goals align with the kind of life you’ve envisioned for yourself. For example, if you’re saving for a down payment on a new house, consider putting a photo of your dream home where you can see it every day to stay motivated and achieve your long-term priorities.
Track your spending. Take time to examine your most recent bank statements or use a budgeting app to find out where your money is going each month. What’s the difference between what you’re earning and what you’re spending? Do you have enough cash in your savings account to act as a safety net?
Avoid impulse purchases. To avoid spontaneous or impulsive spending, give yourself a 24-hour block of time to consider whether you should make the purchase. Is it a need or a want? The 24-hour rule can help you to keep the focus on your long-term financial objectives, ensuring greater success in the long run.