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According to a recent Earnest survey, 79% of recent college graduates admitted exceeding their monthly budget. The holiday season could add further financial strain on young people, who are already struggling with finances due to the pressures of purchasing gifts and attending holiday festivities. Fortunately, a trend known as “loud budgeting” went viral on social media earlier this year, with younger people eager to prioritize personal finance and saving money.
“Loud budgeting is openly sharing financial goals and limitations with peers,” said Jenny Twomey, the community communications lead at Earnest. “Instead of silently struggling, people are vocalizing their spending choices, like deciding to forgo a pricey gift exchange or skipping a lavish trip to stay true to their financial plans and values. This openness not only provides accountability but also sparks important conversations about money — a topic often considered taboo.”
Let’s examine how the loud budgeting trend could help people of all ages adhere to their financial plans during the holiday season.
Set Expectations Before It’s Too Late
“Facing challenges in managing their finances, Gen Z and Millenials are increasingly choosing to openly communicate their financial goals and boundaries with friends and family,” remarked Twomey. “By being transparent, they aim to reduce social pressures and stay on track with their budgeting goals, especially during the holidays.”
Loud budgeting suggests speaking openly about your financial situation and not hiding behind your financial struggles. Instead, be open with yourself and with others about your budgeting goals and financial plans. This trend is all about setting expectations in advance before it’s too late to avoid awkward situations, like getting stuck with a bill for an expensive dinner that you couldn’t afford. You don’t want to miss out on your dream vacation next year because you overdid it with holiday celebrations you weren’t even interested in.
Have A Conversation About Gifts In Advance
“The holidays are a great time to try loud budgeting, especially when it comes to gift buying,” said Andrea Woroch, a consumer and money-saving expert. “Speak with your family and friends about gift expectations. Perhaps this year, you will focus only on the kids in your family or set up a Secret Santa exchange, so you’re only responsible for one gift rather than several.”
You’ll want to embrace this financial trend by discussing gifts in advance so you don’t feel responsible for purchasing something you can’t afford. You don’t want to go into debt because you feel you have to get a gift for everyone in your social circle.
Thanks!
Suggest Inexpensive Ways to Celebrate The Holidays
“If your group of friends or family usually plan a festive outing such as going out to eat or catching a show or music at the theatre, suggest a less expensive alternative such as a potluck dinner at your house instead,” remarked Woroch.
There are plenty of fun ways to enjoy the holidays with your social circle without spending a lot of money. Some examples include:
- Look for free activities at local community centers, libraries, churches and other businesses.
- Set up caroling in your neighborhood to spread the joy.
- Search for any local holiday markets to sip hot chocolate by the fire.
“If you have friends who constantly want to go out to dinner or partake in expensive hobbies, ask if you can host a game night or go for a hike in a public park instead,” shared Mark Henry, the founder and CEO of Alloy Wealth Management. A quick search through local social media hubs could help you discover various free events happening near you.
Leverage Free Rewards
Woroch pointed out how you could use free rewards to splurge or to share gifts with friends. She added you can also “refer family and friends to a business or store to earn cash back by sharing your unique URL via text, email or on social media.”
You can use a store loyalty card or find a referral code to leverage free rewards during this holiday season. A common example would be that you could mention to a friend how you’re prioritizing your self-care this year. Then, you could offer to bring this person to the gym or a healthy restaurant using a referral promotion. This will allow you to involve your friends in the journey.
Understand That You’re Not Alone
The most important aspect of loud budgeting and financial transparency is that you may find out you’re not alone.
Tworney illustrated a common example of how loud budgeting could help during the holidays:
“Will your friends care if you have to opt out of their white elephant tradition? Maybe. But if your friend came to you to say their bills were piling up and they couldn’t participate without being stressed out, would you understand? Of course, you would. And they probably will, too.”
It’s important to understand that others are likely struggling financially. This financial trend encourages having honest discussions about personal finance and budgeting so that you don’t put unnecessary financial pressure on your friends.
Henry concluded, “Sharing your aspirations to save and make smart financial decisions with friends and family can help them understand when you say no to plans or ask to find a lower-cost alternative.”
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