What is ‘loud budgeting’ and why is Gen Z opting out of splitting the bill?

Think of all the money you’ve wasted out of sheer awkwardness. The £750 Ibiza hen weekend you felt obliged to attend, because no one else seemed to raise an eyebrow at spending a month’s rent on a 48-hour trip to the Balearics. The time you agreed to split the restaurant bill, even though you ordered the salad while everyone else was eating steak. Now imagine if you’d just… explained your cash-flow situation and said “no”. Liberating, right?

That’s the rationale behind “loud budgeting”, a concept coined by TikTok creator Lukas Battle. It’s all about being vocal about your financial constraints and prioritising your savings goals (rather than spending money through gritted teeth on things you know you won’t enjoy). “It’s not ‘I don’t have enough’, it’s ‘I don’t want to spend’,” Battle said in his original post. “It was meant to be a silly idea that allows people to be financially transparent without feeling embarrassed,” the New York-based comedian later told the Evening Standard.

This “silly idea” has certainly resonated (perhaps because Battle was just vocalising sentiments that we’ve probably all felt at some point). His video has now been watched 1.4 million times on TikTok, and has prompted a whole load more creators to share their advice on how best to broach those awkward conversations and speak honestly about your budgetary limits with the people close to you; #loudbudgeting has clocked up 10.8 million views and counting on the app. “It’s a very public declaration of what you plan to do with your finances,” says Bola Sol, financial adviser and author of How to Save It. “People are over the hush-hush mentality of discussing their money because it hasn’t always worked in their favour… Loud budgeting represents creating boundaries.”

It’s very easy to get cynical about the infinite churn of TikTok “trends”, which generate endless digital column inches but don’t always trickle from the online world into real life. But this one (loudly) speaks volumes about a change in attitudes towards spending. Of course, cutting back and keeping a careful eye on the budget is nothing new. For many of us, it’s the only way to stay out of the red between paydays – yet, thanks to our collective sense of social embarrassment when it comes to talking frankly about money, it’s never really been something people have proudly declared. Maybe we feared being labelled “stingy” by better-off pals. Now, though, frugality has become something that’s roundly celebrated online, from saying “no” to those expensive social occasions to shouting about the bargains you found on Vinted. Once your social media feeds might have been exclusively filled with influencers encouraging you to spend, spend, spend on pricey cosmetics or fashion pieces; in 2024 you’re just as likely to see snappy clips running through easy ways to budget, say, or snazzy infographics breaking down someone’s monthly spend. And there are loads of apps that have essentially turned saving into a game, attempting to make it something fun rather than a drag.

Financial coach and author Clare Seal is the founder of the Instagram account @myfrugalyear, which she set up in 2019 to chronicle her progress out of credit card debt. She welcomes the move from overblown, get-rich-quick advice online to more realistic and honest conversations. “It’s nice to see people talking about the grittier side of money, the scrappier side of it, and not ‘how to make a million quid in one day’,” she says. “So many people are having to cut back, and every time I’m a bit vulnerable [about money] with my [online] community, it seems to be very cathartic for them to be like, ‘Yes, that’s me as well!’ … People are desperate to talk about it.” And posting online can help create a sense of accountability, adds Rajan Lakhani, who works at financial management app Plum. “When you go public and you talk about loud budgeting, you’re putting yourself out there – that’s often a trick that people use to make sure that they follow through,” he says. “Once you’ve said ‘look, I’m going to do something’, it adds that extra incentive.”

This is, of course, a change that’s largely rooted in necessity. It won’t have escaped anyone’s notice that we’re currently mired in a generational cost of living crisis, one that has seen energy prices soar and inflation jump to the highest rates since the Eighties. According to research from think tank The Resolution Foundation, real wages (earnings adjusted to take inflation into account) won’t return to early 2022 levels until the end of 2027, while the Office for Budgetary Responsibility has warned of a 3.5 per cent fall in living standards compared to the pre-pandemic era – that’s the largest drop since the Office for National Statistics started keeping records in the Fifties. “It’s that everyday grind of having to watch the pennies – everyone is having to participate in it,” Seal notes.

Rajan Lakhani, head of communications at Plum

The move towards thriftiness seems especially pointed among younger generations. A 2022 survey by PWC found that 18- to 34-year-olds were dealing with worries about the rising cost of living “in more pronounced ways” than their elders, with 42 per cent planning to save money more, compared to 27 per cent of all adults, and 38 per cent planning to learn more about personal finance. “When we take a step back and look at Gen Z and to some extent millennials as well, they’ve got less support from the state compared to other generations,” says Lakhani. “They’re having to spend more on university fees and more on housing. So I think when we talk about these budgeting trends, a lot of it is born out of necessity … [Young people] have to do a lot more for themselves.”

Louise Millar, strategy director at Gen Z-focused marketing agency Seed, agrees. “There’s a much bigger focus on good financial health from Gen Z,” she says. “They’re in a bad situation at the moment with the cost of living and they definitely know that some of those lifestyle milestones” – buying a house in their twenties or thirties, like their parents might have done, for example – “are way out of reach.” Plus, she continues, “they’ve witnessed some of the mistakes that millennials made in the last recession [in 2008] like credit card debt and 100 per cent mortgages… They basically know that there are no guarantees for them at all. Any standard expectations [they] could have about so many different things in life have been completely removed. So there’s this total change in attitude.” Many of them, she adds, have a DIY ethos when it comes to filling the gaps in their financial education. “And they share it with one another, because they believe in a much more democratic system.”

Hence the boom in frugality-related advice on TikTok, demystifying finances. “For tech-native Gen Z, information that was previously gatekept or cost money to access is available for free online, and anyone can learn about investing or saving,” says Alice Crossley, a foresight analyst at trends agency The Future Laboratory. “If you grew up with a range of creators that are open about the way they budget, then you end up being anchored in that,” adds Lea Karam, behavioural scientist at Behave. “So if one of your friendship group starts saying ‘you know what, I’ve started [turning down plans to save money], the other people find it more normal. Whereas millennials? We used to hide everything and anything [to do with money].” She cites the example of her younger brother, who is 20. “I literally see it first-hand. He said ‘no’ to a friends’ trip to Amsterdam because he wants to make sure that he has enough money next year to do things that give him more happiness, quote unquote … [Gen Z] are not scared of judgement.”

Clare Seal, founder of My Frugal Year

The proliferation of financial advice can be a double-edged sword: a 90-second video can’t always squeeze in all the nuances of a weighty topic like investing, while not all creators will be qualified to dish out tips. And an over-emphasis on frugality at all costs isn’t always helpful or realistic, cautions Seal. “Being super frugal is something that people get very much on their high horse about. There’s a side of it where it’s something people wear as a bit of a badge of honour, how little they can spend, and that goes for all of those ‘no spend challenges’ [on social media] that I also find quite problematic.” She’s previously described such challenges (where people vow to go a certain period of time without buying a single thing) as the financial equivalent of a “crash diet”, risking a disordered relationship towards money.

The shame we often feel around our finances, she suggests, can be deep-rooted: it will probably take more than a wave of social media chatter to pluck that out completely. “On an individual level, I speak to a lot of people who, in their life, their attitudes have changed. [But] on a societal level, I think there’s still a lot of the big stigmas around being perceived as ‘mean’, or being in debt. They are still there. It’s just a case of chipping away and chipping away, and then maybe one day the whole thing will crack.” For that reason, she reckons, “trends where people actually start opening up and talking about how things really are for them … [are] only a good thing.” So next time your friend tells you they can’t make it out for drinks at that place you both know is a rip-off, don’t roll your eyes and make them feel bad: maybe talk about something fun you can do instead. And definitely don’t feel bad about RSVP-ing “no” to the exorbitant hen do (you won’t regret it).