“Loud budgeting”—openly discussing financial priorities—has become a popular trend, helping people set boundaries with friends and family. New research by Standard Life, part of Phoenix Group, shows younger generations are more comfortable discussing finances and often decline social activities to prioritise long-term financial goals.
Generation Z (ages 18-27) is more at ease discussing money than older generations. 61% of Gen Z are comfortable discussing finances with friends, and 71% with family. In contrast, only 49% of 35 to 54-year-olds and 50% of those over 55 feel comfortable discussing finances with friends, while 61% of 35 to 54-year-olds and 69% of over 55s are comfortable with family.
Furthermore, 68% of Gen Z adults have turned down social events due to financial constraints, with 49% preferring to save for future goals.
The practice of loud budgeting can significantly boost long-term savings. Standard Life analysis suggests that channelling money saved from social events into pensions could yield substantial benefits. Increasing monthly contributions by just 2% over a career could result in tens of thousands of pounds more in retirement funds.
For instance, someone starting full-time work with a salary of £25,000 at age 22, paying standard auto-enrolment contributions (5% employee, 3% employer), could accumulate £434,000 by age 66. By increasing contributions to 5% employee and 5% employer, the total could rise to £542,000—a £108,000 increase.
Dean Butler, managing director for retail direct at Standard Life, said: “The last few years have been financially tough and it’s easy to see why the concept of loud budgeting has taken off. Normalising conversations about money and empowering people to be comfortable talking about how they’re working towards financial goals is healthy, and hopefully makes a difference to people’s short and long-term finances. Our research shows that younger generations feel more comfortable openly discussing their finances than their predecessors, however having an honest conversation about money can benefit people of all ages.
“If those that make additional savings due to loud budgeting channel this towards their pension contributions, they can significantly boost the pension they retire on. While there are always trade-offs between short and longer-term financial goals, consistently paying into a pension from as early an age as possible and topping up payments can make a massive difference over time. Some employers will also match the contributions you make, giving your pot a further boost. If you’re able to save into a pension and increase your contributions above the standard levels, your future self is likely to thank you for it.”
