There’s a social media movement gaining traction right now that’s helping people to normalize talking about money in an authentic way.
It’s called "loud budgeting," and it turns out there are many people online claiming that this approach to saving is helping them stay on track when it comes to their money goals – especially as the rising cost of living puts pressure on their finances.
The loud budgeting trend encourages people to be honest with others about their finances and say “no” to purchases or events they can’t afford, or don’t wish to spend their money on. It's a strategy designed to put your money aspirations at the forefront for friends and family to see and hear.
An example? Telling a friend that you can’t go out to a concert next weekend because you’re saving money to pay off your car loan. Or asking your family to come over for a potluck dinner instead of going out to an expensive restaurant. The idea is that you don't have to break the bank to meet the expectations of others, but rather stick to your budget in support of your financial goals.
Here are five tips that could help you save money and make loud budgeting a habit, and not just a passing trend:
Get started by making a budget
The actual budgeting aspect of loud budgeting isn't new. In fact, financial advisors have been advocating this same foundational advice for years: understand how much money you make, spend, and save so you can get a better handle on your finances.
Sometimes, however, you may need a little help getting started. When it comes to how to make (and stick to) a budget, there are tips from TD that can help. A tool like the TD Personal Cash Flow Calculator is helpful when it comes to crunching those numbers. There are additional TD resources available to help with understanding your finances, including the TD Financial Health Assessment tool.
Set clear financial goals and priorities
Once you have a budget, you can set clear financial goals that align with your income and the kind of life you are envisioning for yourself. Your goals should be specific, and it’s helpful to remind yourself of your “why” when loud budgeting.
For example, if you’re saving for a down payment on a new house, consider putting a photo of your dream home somewhere you can see it every day. By using motivating images and tactics like visualization, you’re more likely to stay inspired and honour those long-term priorities – even if it means occasionally experiencing short-term discomfort from having to say “no” to certain opportunities.
Track your spending
It can be difficult to set specific spending targets if you don't have a clear overall financial picture. 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 for unexpected expenses? And are you spending more in a specific area than you thought you would be?
Once you understand where and how you are spending your money, you can then start thinking about potential modifications to your expenses and where you might want to pull back. For example, if buying lunch daily with your co-workers is costing you more than you realized, you might opt to buy lunch once a week instead. If you have a TD savings, chequing and/or credit card accounts, you could use TD MySpend to help track purchases made through these accounts.
Avoid impulse purchases
The act of spontaneous spending – without taking your long-term financial aspirations into account – is known as "impulse buying." There are, however, strategies that can help curb impulsive spending and help you redirect your attention towards those important longer-term financial objectives.
One strategy is the “24-hour rule” where you give yourself a 24-hour block of time to really consider whether you should make the purchase, and whether it is a need or a want. The 24-hour rule, which is meant to establish a buffer between you and your impulse buy, can help you to keep the focus on your long-term financial objectives, ensuring greater success in the long run.
Communicate with others
Make time and space to discuss your financial needs, values, and aspirations with friends and family – especially if you’re trying to change your spending or saving habits.
While it may be challenging to have an open conversation about money matters with your loved ones, you should never feel guilty for adhering to personal financial objectives. By sharing your financial plans with others in your circle, and engaging in loud budgeting, you're not only keeping yourself accountable, but you may also inspire others to do the same.
