How Gen Z’s “loud budgeting” could help your household finances

Gen Z has grown up in a world very different to that of their parents.

Comprising those born between 1997 and 2012, this cohort has grown up with the internet and technology embedded in their daily lives. Many are coming of age post-2008 global financial crisis and in the wake of a global pandemic.

As they come to terms with the current cost of living crisis, Gen Z are adopting new ways to cope. This can be seen in their approach to advice, which increasingly sees them turning to social media. But it’s also evident in the terminology they use.

One of a raft of newly coined terms is “loud budgeting”. Keep reading to find out what it means and how it might be useful to you and your plans.

Loud budgeting could keep your long-term financial plans on track

Professional Adviser recently reported on the rise of social media financial influencers, or “finfluencers”.

Gen Z is increasingly turning to these finfluencers for “advice”. Worryingly, though, this content often disregards necessary risk warnings and disclosures, despite many posts recommending specific products.

Finfluencers proliferate on social media platforms like TikTok, YouTube, and Instagram. It is on these sites that the way Gen Z talks about money is changing.

Lukas Battle, a New York TikTok creator recently went viral with his term, “loud budgeting”.

Loud budgeting aims to break taboos around talking about money, helping people to be honest and open about their finances. That might mean how much they can afford to spend, or where and when they want to spend the money they have.

This transparency, with yourself and your loved ones, can make budgeting easier, and help you to re-engage with your finances.

Battle compared loud budgeting to taking his own sweets into a cinema. It’s not about whether you can afford to buy expensive cinema sweets, the point is that you don’t have to spend your money that way. And by making this saving, you gamify your spending and saving and feel like you’ve “won”.

Loud budgeting can be as simple as looking for voucher codes to lower the price of the things you want to buy or maintaining a monthly budget that you discuss with loved ones. But you can take the principal into your longer term plans too.

Loud budgeting can help you focus on the long term

In the context of your retirement and investment plans, loud budgeting means being honest with yourself about what you want.

Think about the lifestyle you’d like to live post-work and then do what you can to make this dream achievable. That might mean cutting back to save more, and it will likely mean being transparent with loved ones.

Talk about your goals with your partner and work out ways to plan together. This can be beneficial both financially and non-financially.

Breaking the taboo around talking about money can help to avoid arguments in a relationship and shared goals should increase your engagement and accountability.

There are tax advantages too. You might share allowances to lower a joint tax liability or manage your pension savings to maximise relief on contributions.

At Murphy Wealth, we can help you with all aspects of your short- and long-term saving plans so get in touch if you need budgeting help.

Loud budgeting isn’t the only new Gen Z term but some should be approached with caution

While loud budgeting might be successfully applied to your finances, this might not be the case with all of Gen Z’s approaches.

Other recently coined terms include:

• “Doom spending”, a new take on retail therapy
• “Soft saving”, which involves prioritising life experiences over bank savings
• “Cash stuffing”, which is the equivalent of budgeting using separate envelopes for wants, needs, and your future self.

Compartmentalising your monthly expenditure can make budgeting easier. And spending some of your hard-earned cash on experiences is a great way to make memories with loved ones. But remember to stay focused on your long-term goals and ensure your actions in the present don’t jeopardise your future financial security.

If you have Gen Z children or grandchildren you might consider passing on the money lessons you have learnt during your career. These lessons could help them to avoid the pitfalls of social media advice and help them to think about what their long-term goals are. You might even put them in touch with us.

Get in touch 

If you have questions about how to adopt Gen Z techniques into your budgeting or you’d like to discuss any aspect of your long-term financial plans, please email us at beyourself@murphywealth.co.uk or give us a call on 0141 221 5353.

Please note

This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.

The information contained in this blog was correct at time of writing and may be outdated at time of reading.