Loud Budgeting: Why This TikTok Trend Has Implications for Your Compensation Strategy

Less than a month into the new year, and a new financial trend is already turning heads and wallets – Loud Budgeting. 

Gone are the days of whispered conversations about money. This year, financial transparency is not just encouraged, it's celebrated. Loud budgeting is all about being upfront with those around you about your spending limits and financial goals.

As HR professionals, why should you care? 

Because Loud Budgeting isn't just a TikTok fad. It's a valuable window into how young professionals, especially Gen Z and Millennials, view and manage their finances. This isn't just about saving money — it's about a cultural shift empowering people to prioritize financial wellness. 

Let’s dig deeper into the cultural currents driving loud budgeting to uncover what it means for your compensation and employee benefit strategies. 

What is Loud Budgeting?

“Loud Budgeting” means being open about spending limits and financial goals with your friends, family, and community. This money management tactic moves away from the secrecy that has historically defined personal finance.

For example, imagine getting a wedding invitation to a cousin’s destination wedding. You balk at the cost of hotels and plane tickets, but you can’t really say no, can you?

Actually, you can, say those practicing Loud Budgeting.

Instead of booking a trip you can’t comfortably afford out of a sense of obligation, you would explain to your cousin that you’ll have to celebrate from afar because you’re trying to pay off your car so you cannot afford the trip. 

Created by TikTok creator Lukas Battle, his trend has taken off among Gen Z and Millennials. Here, users don't just discuss their budgets — they broadcast them, challenging the taboo of talking about money. Loud Budgeting turns financial prudence into a shared, communal activity, where discussing money matters is not just accepted but encouraged.

The appeal of Loud Budgeting lies in its honesty and empowerment, resonating with a generation that values authenticity and community engagement. And it’s about more than saving money. This trend fosters a culture where financial wellness is a public and collective goal — which is no surprise in a world where employees say financial wellness is one of the most important dimensions of wellbeing.  

What HR Leaders Can Learn From Loud Budgeting

For HR professionals, Loud Budgeting offers valuable insights into the financial attitudes of the emerging workforce. It implies a demand for compensation and benefits strategies that mirror this openness and support financial wellness. Understanding this trend can be crucial in shaping effective HR policies that resonate with younger employees.

Gen Z and Millennials, the primary proponents of Loud Budgeting, exhibit distinct financial behaviors compared to previous generations. Raised in the digital era, Gen Z, in particular, has grown up with technology as an integral part of their lives. This has shaped their approach to financial management, with a strong preference for tech-savvy solutions and a tendency towards responsible financial habits. For instance, Gen Z values in-person shopping experiences but is also budget-conscious, seeking value and innovation in their purchases. They display strong brand loyalty, especially to brands with a robust digital presence and alignment with their social and eco-friendly values​​.

In contrast to Gen Z's digital fluency, Millennials have experienced significant economic challenges, such as the 2008 financial crisis. This has influenced their cautious approach to debt and a strong emphasis on savings and financial security. However, both generations share a common trait: a heightened awareness of financial literacy, often turning to family and digital resources for financial guidance​​.

The impact of social media and digital platforms in shaping these financial mindsets is profound. Platforms like TikTok have become arenas for sharing and learning about financial management, demystifying personal finance and encouraging a more open and community-based approach to money matters.

For HR leaders, this shift signifies a move away from traditional compensation models to those valuing flexibility, transparency, and wellness. Gen Z and Millennials are looking for workplaces that not only offer competitive salaries but also provide clear communication about compensation and benefits. They appreciate transparency in financial matters and value benefits that align with their lifestyle and wellness goals.

What Loud Budgeting Means for Employee Compensation and Benefits

Incorporating the principles of Loud Budgeting into HR strategies means acknowledging these shifts and adapting to them. This could involve revising compensation packages to be more transparent, incorporating financial wellness initiatives into your wellbeing programs, or leveraging technology to provide more accessible and engaging financial education and resources, like budgeting apps. Concrete action items you can take include: 

1. Provide Budgeting Tools: Help your employees budget loud and proud with subscriptions apps that enable employees to track their spending progress towards savings goals.
2. Regular Financial Wellness Workshops: Host monthly or quarterly workshops focusing on financial education. These can cover a range of topics  — from basic budgeting to investment strategies — tailored to the needs of younger employees.
3. Clear Communication Channels: Establish dedicated channels, like a section on the company intranet or regular newsletters, focused on compensation and benefit updates. Ensure these channels are easily accessible and encourage open feedback and questions.
4. Transparent Compensation Structures: Clearly outline compensation frameworks, including how salaries are determined and the potential for growth. This might include publishing salary bands for different roles or creating a clear, documented path for salary progression.
5. One-on-One Financial Consultations: Offer personal financial consultations with experts. These sessions can help employees understand their compensation package, including benefits, and how to make the most of them.
6. Confident Education on Benefit Utilization: Regularly educate employees on how to maximize their benefits. This can be through workshops, informational videos, or interactive webinars.

By taking these steps, HR leaders can not only meet the expectations of their younger employees but also foster a culture of financial wellbeing and transparency within the organization.

Leverage Financial Wellness at Your Organization

The Loud Budgeting trend highlights the evolving expectations of the workforce, particularly among Gen Z and Millennials. Leveraging this movement toward financial transparency can enhance your compensation and benefits strategy, sharpening your reshaping talent acquisition and retention strategies. 

This proactive approach to finance not only caters to the diverse needs of the workforce — it also strengthens the organization's appeal to prospective and current employees.

Wellhub is there for HR professionals seeking to integrate financial wellness into their organization's wellbeing strategy. With more than 50,000 wellness providers,  all-in-one wellness programs support every dimension of wellbeing.

Embrace this opportunity to enhance your organization's financial wellness initiatives. Reach out to a Wellhub wellbeing specialist for a program that will help you take care of employees’ holistic wellbeing!

References

• Glum, J. (2024, January 12). 'Loud Budgeting' Is the First Viral Money Trend of 2024 — but Does It Work? Money. Retrieved from https://money.com/what-is-loud-budgeting/
• Wellhub. (2023, October 18). The State of Work-Life Wellness 2024. /en-us/resources/research/work-life-wellness-report-2024
• Spector, N. (2021, September 15). A Look at Gen Z’s Financial Habits, From Spending to Saving and More. Yahoo Finance. Retrieved from https://finance.yahoo.com/news/look-gen-z-financial-habits-160942962.html