These 3 Drawbacks of ‘Loud Budgeting’ Might Hold You Back From Saving Money

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Loud budgeting and saving money shouldn’t make you lonely. See how to fight FOMO and avoid downsides of loud budgeting with creativity and a sociable spirit. [[{“value”:”

Loud budgeting is not just a goofy video trend on TikTok encouraging people to be more vocal about their money goals; it’s become a mini-movement and Gen Z rallying cry in the world of personal finance. Gen Zers love loud budgeting because it’s giving them a new vocabulary to talk about their spending, debt, and financial wellness.

But budgeting isn’t always easy or painless, even when it’s “loud.” According to a new survey from Clarify Capital, Gen Zers who use loud budgeting habits often feel a few drawbacks and pain points. If you want to get the biggest benefits of loud budgeting, it’s important to be aware of the possible downsides.

Let’s look at the top three downsides of loud budgeting, according to Clarify Capital’s survey of Gen Z.

1. Experiencing FOMO (fear of missing out) on events (56%)

The Clarify Capital survey of Gen Z found that 56% of loud budgeters said they sometimes feel “fear of missing out” (FOMO) on events. If you’re sitting at home, cooking dinner for yourself and canceling streaming subscriptions to save money, it’s easy to feel like the real action is out there, where life is happening without you.

But saving money doesn’t have to feel lonely. Here are a few ideas to turn frugality into a more sociable, creative activity:

Have a picnic brunch in the park instead of bottomless mimosas at a crowded (pricey) restaurant.Start a hiking club that meets at local forests and nature preserves, instead of going to an expensive gym.Host a Netflix and microwaved popcorn party at your place, instead of shelling out big bucks for a movie theater.Host a Spotify DJ party at your home, with drinks and dancing for a much lower cost than a night out at a club.

Maybe it’s not “spending money” that you really miss; maybe you’re just wistful about not spending enough time with good people in your life. You can still have fun occasions and happy memories, while saving money in creative ways.

2. Living below your desired means

The second biggest drawback of loud budgeting that was mentioned by the Clarify Capital survey was “living below your desired means” (mentioned by 48% of respondents).

If you want to save money for the future, there has to be a trade-off between the goals and desires of present-day “you,” and “future you.” Sometimes that means “present-day you” must accept a lower standard of living, so that “future you” will be better off. Are both of you going to be happy with the deal?

Here are a few examples of living below your means that (most people) might consider fair and reasonable:

Saving money on takeout by cooking at homeCutting expensive conveniences so you can boost your emergency savingsCanceling subscriptions or memberships that you don’t use enoughChoosing lower-priced clothes instead of buying all-new, high-end, designer labelsBuying a used car instead of a new carWaiting a few years to buy a home so you can save up for a bigger down payment

But sometimes living below your means is extreme and impractical, in a way that reduces the well-being of current you and “future you.” Here are a few situations where choosing to save money instead of spending could be the wrong move:

You live in a place that feels unsafe or has high levels of criminal activity: your home needs to be a peaceful, restful place for you to recharge after a long day at work. If you can afford to move to a better neighborhood, that money is well-spent.Your car is breaking down so often that the mechanics don’t recommend fixing it anymore: Sometimes you just need to spend the money and get an auto loan to have a reliable car. It’s important to have good transportation to get to work, and it can be worth borrowing for.You haven’t been to the doctor or dentist in years: “Health is wealth.” If you can afford to pay your copay or whatever it costs to get an annual physical and occasional dental checkups, spend the money. Trying to skimp on healthcare is often a false economy — you end up paying for it in other ways.

3. Financial pressure

The third most common loud budgeting drawback mentioned in the Clarify Capital survey was “financial pressure” (39% of respondents). Sometimes when you’re saving money, that automatic transfer from your checking account each month feels like another “expense.” Let’s say you’re trying to save $500 per month, and you earn $4,000 per month — that savings goal is eating up 12.5% of your income!

Loud budgeting can cause financial pressure in other ways. What if you make big promises about how much you’re trying to save, and then fail? What if you try hard to save money each month, and give up going out for tasty dinners and fun times, and you still can’t make the numbers work?

But here’s the thing to remember: taking control of your financial life is always worth trying, even if you fall short of the goal. And you don’t have to do it alone. The best budgeting apps today make it easier than ever to see how much money you make, where it goes, and what you could do differently.

Bottom line

Loud budgeting is not a magic wand; there are still going to be challenges and drawbacks along the way. But if you’re aware of the drawbacks of loud budgeting, you’ll be more likely to stay on target for your financial goals. Try to approach your personal finances with clarity, intention, and creativity. You can have the life you want, while still having money in the bank.

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