‘Loud budgeting’: What it is and why experts say it works

(InvestigateTV) — A growing money trend called “loud budgeting” is gaining traction as summer spending climbs — and a personal finance expert says the concept is simpler than it sounds.

Loud budgeting means being vocal about financial priorities and saying the hard part out loud for friends and family to hear. Rather than quietly skipping a trip or turning down an invitation, it means explaining why — for example, telling people you are saving for a house.

Kim Palmer, a personal finance expert at NerdWallet, said verbalizing financial choices serves multiple purposes.

“Talking out loud about our financial choices basically helps us stay on track because first of all we’re reminding ourselves of the goal,” Palmer said. “We are also telling our friends who can then encourage us and keep us on track as well. It also takes away some of the embarrassment and shame that often comes with talking about money.”

Palmer said opening up about financial choices can also make it easier to have broader money conversations — seeking advice and sharing challenges with people who may be facing similar situations.

Summer is a particularly relevant time to practice loud budgeting, Palmer said, because expenses tend to rise during the warmer months.

“Our expenses tend to go up during these warmer months,” Palmer said. “The sun stays out longer, we’re spending more, and we’re out more. So it’s actually more important than ever to be a loud budgeter.”

One example Palmer offered is telling friends you are skipping an expensive concert and going to a free local event instead. Being transparent about swapping out costly choices for more affordable ones puts the focus on the bigger financial goal rather than the sacrifice.

Palmer said sharing those decisions openly may also bring friends on board — making it easier to save when the people around you understand and support the goal.