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Loud Budgeting might be the key to reclaiming our financial freedom.
While the past New Year celebrations have been commemorated with goal-setting that prioritized finding love, traveling the world, or being more organized, 2024 is the era of the payback—debt payback, to be exact. The U.S. inflation rate is still over-indexed, sitting above 3%, driving the cost of living way beyond most people’s comfort level, and has consequently plunged many of us into unfavorable financial situations.
Per a recent survey by USA TODAY Blueprint, 88% of all respondents say financial health impacts their overall happiness. Another report from healthcare marketplace Sesame found that 3 in 5 Americans’ New Year’s resolutions are to save money and ramp up their budget.
What is loud budgeting?
With that, it’s no surprise that the Loud Budgeting trend has taken the web by storm. It describes a tactic for shamelessly sticking by your budget no matter what and was popularized by TikTok user Lukas Battle (@lukasbattle). To date, the video they posted introducing the concept has amassed millions of views and tons of positive feedback. But it can be easier in theory than practice to remain financially solvent in a consumerist world.
That’s why we sat down with personal finance expert Julie Castro Abrams, CEO of How Women Lead, to discuss five ways we can navigate the evolving financial landscape and how women can make a dent in their holiday debt and beyond in 2024.
Step 1: Get Real About Your Money Resolutions
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Castro Abrams says it’s essential to understand how important goal setting is—for your future success and overall survival.
“If you look at the philosophers from thousands of years ago, literally resolutions/goal setting is an imperative for the human condition,” she explains. “When you no longer have a goal you’re striving towards, you actually get depressed, and you’ll find that life does not go well for you.” With that, your goals should still align with reason.
“I think it should be something that is reasonable to achieve,” she explains. “If you can achieve it, you’re going to feel successful, and you’ll set the next one.”
She explains that the best way to get more calculative about goal-setting is by shifting how we view it. “There’s so much shame and emotion with money. It’s a tool. It’s not your worth.”
Step 2: Rework your reward systems
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Many of us have fallen into debt due to lifestyle creep, or in other words, living outside our means for the sake of creature comforts. Once the habit of rewarding ourselves with nice purchases is established, it can be hard to break cold turkey. That’s why Castro Abrams suggests making small adjustments over time.
“Instead of celebrating with a takeout meal or a new clothing item, think to yourself how much sweeter the win will be once I’ve done away with all this debt.”
Step 3: Identify what’s causing the most financial strain
“Make a list and just breathe it in and get it all on paper. Pay off the highest interest stuff first. Then, write yourself a note asking, ‘What if you didn’t have any debt? How much disposable income would you have on a monthly basis or a weekly basis? What are some must-haves and what are some nice to haves?’ Once you have that small visualization element of what financial freedom could really look like, that would incline you to move toward your goals.”
Step 4: Negotiate with everyone you owe—no, seriously
“If you’re in a large amount of credit card debt, in the five to six-figure range, negotiate with those creditors,” she suggests. “You can take a $20,000 credit card bill, and you can negotiate it down.” She explains that once a bill goes into collections, the financial institution sells your debt for about 10% of its original worth. Because of this, the debt paydown is more likely to be negotiable. Calling the debt collector directly and offering a settlement offer is one of the ways you may be able to save yourself some serious funds in the long run.
Even if your debt has yet to reach the collection stage, it’s still highly suggested you reach out to your credit card company and negotiate a lower interest rate if you’re in good financial standing with them.
“Often, when you have a really high revolving credit limit, there’s a likelihood that you can reach out and say, ‘I’m going to turn that into a loan and cut off my revolving credit—or do you have a better interest rate you can offer me, or I’m going to move my debt to somebody else.'”
Step 5: Give yourself credit for getting this far
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Castor Abrams shares she often works with Black women in top leadership positions and consequently has developed a deep understanding of their unique relationship with money.
“All the Black women that I have deep relationships with tell me, ‘I can’t actually be vulnerable about any of my issues around money, around my friends and family, because they assume I always have it together.’ So, all of a sudden, it discounts any emotion or ability to talk about what’s not fair or what’s hard. The financial responsibility for family is especially complex for Black women.”
To her point, according to a 2023 report prepared by Pew Research, in straight marriages where both spouses make roughly the same amount, Black women are more likely to earn more than their husbands but still bear the domestic responsibility.
“Black people have been subjected to financially predatory behaviors for generations and essentially had the rug pulled out from them. And as a Black woman, even more so. But still, they don’t get a lot of leeway. So, if you’ve found yourself in a situation where you want to get better with your finances, you will. Be gentle with yourself. As long as you have a plan, there’s a way.”
Would you try loud budgeting?
