The American education system has come under fire for a variety of reasons ever since its existence and the current cost of living crisis means that young Americans’ lack of financial literacy is now in the limelight. As with most things, social media has taken over the role of enlightening young Americans on managing their money. This would be alright of course, if it were not for the fact that not all the financial gurus online are qualified for the job, and the reality that the hive mind of the internet is a constantly changing thing – what is accepted today is often rejected violently in a week. The newest financial concept being floated among Gen Zers is ‘loud budgeting’, the expression of the need to prioritise some expenses over others whenever it is deemed appropriate.
Comedian and writer Lukas Battle is generally accredited with the new term. He coined the term in a TikTok post, stating that “loud budgeting is a new concept I am announcing for 2024, it’s the opposite of quiet luxury. If your friend texts you ‘I want to hang out’, you say ‘I don’t want to spend gas money to come see you and listen to you talk about your ex for three hours.’” The situation is a little exaggerated of course, but the idea is sound. The idea replaces the concept of doomsday spending that used to proliferate the internet in the latter part of last year. Doom spending trended when mounting economic fears made some people meet the stress with more and more spending. Black Friday shopping and holiday shopping remained as high as ever in 2023, and it remains to be seen whether loud budgeting will have a real effect in dollar terms.
Most of the older generations are already criticising the initiative that the younger generations are taking to cut down on their expenses. Some are ripping into the fact that cutting back is hardly a new financial concept, stating that not spending more money than you earn is something that everyone grew up with. It’s easy for the older generations to tease the younger in this respect of course. Of course, boomers remember their grandparents talking about the Great Depression, and living in comparative poverty themselves. This is no comparison to what Gen Z is going through, however, the circumstances they’re facing in what is now being defined as late-stage capitalism are vastly different. There also is no point in criticising what is being laughed at as an inability to practice some financial discipline. The world is struggling to meet the fallout of climate change despite the best efforts of everyone trying to save it from a fiery fate, and it’s difficult to practice self-discipline when you sincerely believe that it will all come to nothing.
It is factors such as these that are causing consumer trends, and the rationalisations behind them to fluctuate so drastically. Some experts are even saying that loud budgeting is a particularly healthy take on managing your expenses. Financial difficulties tend to be a taboo subject among most communities, and people often overspend to hide how poorly they are doing from their nearest and dearest. Someone willing to be ‘loud’ or at least vocal about what they are and are not willing to spend money on shows a degree of emotional literacy when they choose to do so. Emotional literacy is an important component of managing your finances, as we tend to use finances as an emotional outlet. Expressing what your intentions are towards the money you do have will ensure that the people around you manage their expectations accordingly.
Planning for financial stability can be an emotionally fulfilling task as well. This includes identifying what your real priorities in life are and prioritising quality expenses over less meaningful ones. This helps you prioritise quality of life over consumption. This attitude will then make it easier to turn down engagements that eat too much into the monthly budget. Communicating the inability to meet certain expectations can be an empowering one, but being insensitive about it can also cause a strain in relationships. This is especially true of speaking about numbers with people who have been brought up to be more conservative in their affairs. Detailing what you need from people around you might cause them to think that they need to give a helping hand. It would be better to avoid specifying numbers, and instead of merely bowing out of engagements, it would be still better to arrange for more budget-friendly options in a manner that doesn’t put a strain on relationships. If it is to be meaningful, loud budgeting should be a positive experience for everyone involved.
In addition to being tactful about the way money constraints are communicated, it is also important to be tactful about how such information is received. There are elements of both give and take in ‘loud budgeting’. As you receive information about the limitations that your loved ones have to live with, it is important to consider the level of trust it takes to do so. When someone communicates their inability to meet a social expense due to the expense, it’s important to not take the rejection personally. Even open and honest communication can be elegant and dignified. Unsolicited advice is unwelcome no matter the situation, while empathy and support are always welcome. Even when someone reveals a certain part of their lives, it is still not in anyone’s place to make assumptions or pass judgment about someone else’s life. Practical assistance should also be offered in a way that doesn’t make either the giver or the receiver uncomfortable or humiliated.
(Theruni M. Liyanage)