Understanding ‘Loud Budgeting’ & Why Credit Unions Should Embrace It

As we recognize Financial Literacy Month, a new phenomenon called “loud budgeting” is making waves, especially among millennials and Gen Z. This social media-driven trend represents a paradigm shift in how we approach personal finance, emphasizing transparency, accountability and community support in financial decision-making.

But what exactly is loud budgeting?

Loud budgeting is a financial approach that involves openly declining social invitations – such as dinner invitations – that don’t align with an individual’s financial goals while communicating the reasons for their decisions. It encourages financial responsibility and helps individuals stay on track with their plans.

Unlike traditional views that regard finances as a private issue, loud budgeting promotes vocal and transparent discussions about one’s financial journey with friends, family and online communities, fostering constructive conversations about money management.

Breaking the Taboo

Historically, discussing personal finances has been considered taboo, often leading to feelings of shame or inadequacy. Loud budgeting challenges this stigma by fostering an environment where financial struggles are openly acknowledged and supported. By sharing experiences and strategies, individuals can learn from each other’s successes and failures, gaining valuable insights that contribute to better financial decision-making. After all, aren’t we all better off when everyone is financially stable?

The Role of Social Media in Loud Budgeting

The advent of social media has played a pivotal role in popularizing loud budgeting. Platforms like TikTok have become hubs for financial advice, budgeting tips and success stories. While not all content is accurate and may even be harmful, content that is accessible and relatable has demystified the topic of finance for younger generations. In response, they feel empowered to discuss and seek advice and take greater control of their financial futures.

In fact, according to a study by Forbes, 76% of millennials and Gen Z adults believe financial content on social media has made it less taboo to talk about money, with 62% expressing that they feel empowered by their access to financial advice on social media.

Why Credit Unions Should Take Notice

Understanding these trends is crucial for credit unions that want to connect with and support their future members. Loud budgeting, when practiced effectively, can improve overall financial health by encouraging responsible spending habits and potentially reducing reliance on high-interest loans or overdrafts.

Credit unions and other financial institutions benefit significantly from embracing the principles of loud budgeting. By understanding and leveraging this trend, they can enhance their financial literacy efforts and connect with younger demographics.

Here’s how:

1. Engaging younger members: Millennials and Gen Z, who are early adopters of loud budgeting, represent the future of financial services. By acknowledging and supporting their preferred financial practices, credit unions can build trust and establish meaningful relationships with these consumers.

2. Fostering responsible financial behavior: Loud budgeting promotes responsible spending habits and financial accountability. When individuals openly discuss their budgets and financial goals, they are more likely to make informed choices and avoid unnecessary debt.

3. Reducing financial stress: Open conversations about money can alleviate financial stress and anxiety. By providing a platform for members to share experiences and seek advice, credit unions can contribute to improved financial well-being.

4. Aligning with Financial Literacy Month goals: The principles of loud budgeting align perfectly with the objectives of Financial Literacy Month. By promoting transparency, education and community support, credit unions can empower members to make sound financial decisions year-round.

Loud budgeting is more than just a social media trend; it’s a movement that promotes financial empowerment and inclusivity.

By embracing this approach, credit unions can play a vital role in shaping a financially literate society, one where individuals feel confident and supported in their pursuit of financial well-being. As we celebrate Financial Literacy Month, credit unions should consider amplifying the conversation around loud budgeting and its potential to transform the way we think about money.

Parker Graham is the founder and CEO of Finotta, an Overland Park, Kan.-based provider of embedded fintech for digital banking.