Want to Actually Save Money? Here’s Why You Need to Start ‘Hard Budgeting’

TikTok has quickly become a source of recipe ideas, style inspiration, organizing tips, and even personal finance advice for many people.

And lately, a new approach to money management has been making waves on the platform: “hard budgeting.” Since the start of the new year, TikTok has been flooded with videos touting the benefits of this method and the best ways to make it happen.

“Business budgeting is a financial strategy in which you share your money aspirations directly and not secretly with the people in your life,” Derek Ober, a financial advisor at Northwestern Mutual, told Talk News. “That is a public commitment. Hard budgeting centers on the idea of ​​telling others why you choose not to spend money on something and being transparent about why you save.”

For example, you might say no to expensive dinners or outings together and explain that it’s because you’re prioritizing paying off credit card debt or saving for a down payment on a house. The idea is to proudly own your money consciousness.

“Until now, we typically saw people showing off their money on social media rather than showing off their financial struggles,” says budgeting expert Andrea Woroch. “Great budgeting suggests you talk about your financial situation and make spending decisions that support your goals and fit your current budget and needs. Using financial difficulties as an excuse not to attend certain group meetings, trips, or gifts is socially acceptable.”

But are these social media trends being accepted by experienced financial advisors? We asked some experts to break down hard budgeting and share their advice for implementing this approach into your everyday life.

Is massive budgeting a good idea?

“As a financial advisor, I think this trend is a great approach to managing your finances,” says Ober. “Telling others why you choose not to spend money on something can keep you accountable and provide positive reinforcement from other big budget makers who are doing the same thing.”

She notes that hard budgeting offers a sense of camaraderie that makes it easier to say no to activities and expenses that don’t fit into your current budget.

“Ultimately, I think this trend goes beyond the idea of ​​talking about your budget as an excuse not to do something, but rather helps move the conversation about money in the right direction so that we can feel comfortable discussing previously taboo topics like debt,” Woroch said . “To this day, there is still a negative stigma around talking about money and shame around debt.”

Hiding your financial difficulties hinders your ability to make improvements in the future, he says. And if you worry about what other people think, you’re more likely to spend money on things you shouldn’t.

On the other hand, Woroch notes, big budgeting is “anti-YOLO.” Additionally, talking about your financial problems gives you the opportunity to gather helpful information from peers who have been through similar situations. It may also bring you closer to your loved ones and personal values.

“It’s easy to get caught up in irrational lifestyle inflation that allows spending to increase on things like food and vacations just because your income increases,” said Jacqueline Howard, head of financial health at Ally Bank. “Great budgeting can help you realign the value of your spending with the things that matter most to you and rethink the reasons behind every purchase. Someone may realize they are spending too much money just because that is what their friends are doing, or because of something they saw on social media.”

Are there any downsides?

Taking the shame and stigma out of debt and budgeting conversations can help you live a more financially healthy lifestyle. But harsh budgeting trends can lead to several disadvantages if implemented incorrectly.

“I hope we don’t see people taking advantage of this budgeting concept in an effort to be cheap, such as skimping on tipping worthy service providers,” Woroch said.

He also emphasized the need to back up your “tough” words with actions.

“It’s important that you don’t fall into the trap of just talking,” says Woroch. “Taking action is the key to improving your finances and it requires a detailed plan to make it happen.”

Setting specific goals -- and communicating them -- will help you implement great budgeting.

MoMo Production via Getty Images

Setting specific goals — and communicating them — will help you implement great budgeting.

What’s the best way to implement big budgeting into your life?

Once you decide to try budgeting in a big way, taking a mindful approach will help you stick to it and see real results. Some general guidelines to keep in mind:

1. Set specific financial goals.

“It’s best to identify specific goals you want to achieve this year, so you can clearly articulate your intentions to others,” says Ober.

Setting clear goals can also help you budget more effectively.

“Spending less money and saving more is a great goal, but it doesn’t give you much direction to follow,” Woroch says. “You need to know what you are working towards, so be specific when setting financial goals and then create a budget that includes realistic debt payments, savings, etc.”

2. Consider your values.

As you set your goals and budget, take note of the things that truly bring you joy and meaning so you can incorporate them into your monthly spending plan and cut back elsewhere.

“A values-based spending plan takes your personal values, goals and priorities into account, while a budget will track your monthly income and expenses,” says Howard. “When creating your spending plan, ask yourself, ‘What are your values? How do you define it?’ It’s easier to make decisions that align with your overall financial goals if you clearly understand those values.”

3. Communicate your needs.

“To practice ‘hard budgeting,’ talk to your loved ones and start discussing financial matters with your children and spouse,” says Michael Hershfield, founder and CEO of Accrue Savings. “This will ultimately help you learn and improve your spending habits.”

Take time and space to talk with friends and family about your financial goals, values, and needs.

“Having an open and honest dialogue with friends and family may sound difficult, but you shouldn’t feel embarrassed about sticking to your financial goals,” says Ober.

If someone gets annoyed when you reject something because it doesn’t fit your budget, have a dialogue about it.

“Make it clear that it’s not about them, it’s about you sticking to your goals,” Ober says.

4. Make an alternative plan.

“While big budgeting may seem positive when you start out, you may start to miss out on the fun stuff,” says Woroch. “When you have to get out of dinner or a weekend getaway, make alternative plans to spend time with your friends that don’t cost much. Invite them to drink at your place, ask everyone to BYOB. Prepare for a hike and picnic. Find free events to attend.”

The key is to emphasize that there are many ways to create memories together and to try to find workable alternatives.

“You could suggest cooking at home with friends instead of going out to eat,” suggests Hershfield. “Another idea is to walk together for 10 minutes instead of ordering an Uber.”

5. Be honest about gifts.

“Just as you’re encouraged to be honest about why you choose not to spend money, be honest about your needs when it comes to gifts for birthdays, holidays, or life events like weddings,” says Woroch. “Instead of making a list of kitchen items you don’t really need, ask family and friends to contribute to a down payment on a house or student debt payments.”

She suggests that new parents on a tight budget can open a custodial account for their baby and asks that grandparents and other loved ones consider making cash contributions, in lieu of expensive toys and birthday gifts, to support their child’s financial future . Many financial institutions and even brands like Gerber offer different custodial account options for families.

6. Try new money-saving hacks.

“While big budgeting means you need to make drastic changes in your spending on social events, you can achieve big savings without sacrificing by reducing your monthly bills,” says Woroch. “This might even give you some room to spend more money at dinner with friends.”

He recommends negotiating rates with current credit card providers, comparing rates with competitors, and canceling unused subscriptions. Consider opening a separate high-yield savings account to earn interest on your money.

“Take advantage of free rewards and cash back tools,” adds Woroch. “Refer family and friends to a business or store to earn cash back that you can use to spend on yourself.” He also recommends looking for cash back apps like Fetch and coupon sites like CouponCabin.

Once you start practicing strict budgeting, you’ll likely learn even more money-saving tips from loved ones through open conversations about finances. The potential for positive impact seems endless.

Ober added, “I hope big budgeting doesn’t just become a trend, and more people feel comfortable being transparent about their financial goals and continuing to maintain accountability.”

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