Americans are coming up with new ways tocombat inflationthrough various budgeting hacks and experts say that a few behavioral and habitual modifications that push balance and commitment can save significant cash in 2024.
Larry Sprung, the bestselling author of “Financial Planning Made Personal,” told Fox News Digital that it is important to have a balance between living for now and saving for years down the line.
“You have to look at the monetary aspect of things, sure. But at the same time, you also have to look at the joy aspect and figure out a way to balance having a joyful life today and enjoying it all versus saving for the future, you know maybe for the future that hopefully you see. But you don’t want to be that person who scrounged for every dollar for when they retire, and they don’t make it,” he said.
Financial wellness expert Veetahl Eilat-Raichel listed several money hacks that consumers should prioritize in 2024, including a habit of viewing paid time off (PTO) in dollars versus days.
According to Veetahl, unused PTO is a liquid asset that can be cashed out and used to pay off your debts.
Employees can unlock approximately $3,000 per year by accessing their accrued PTO’s value.
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“Imagine the possibilities if you were to put that money into a high-yield savings account, which can reap over 16 times MORE money over traditional savings accounts,” she said.
The CEO and co-founder of Sorbet also said a switch from “quiet luxury” to “loud budgeting” can be a helpful tip for financial well-being in the new year.
“High inflation left many consumers with no choice but to rely on spending credit and increasing debt levels. While 2024 inflation rates are slowing down, it’s still the perfect time to adopt ‘loud budgeting’ by passing on extra excursions–like saying no to eating out at a restaurant and instead figuring out what you want and can afford to spend money on, without relying on continued borrowing,” she said.
The new trend called “loud budgeting”is gaining traction as a no-shame approach amid today’s personal finance realities.
TikTok posters, for example, are telling friends and family they can’t venture out for dinner, can’t buy brand-new clothes (they have to buy second-hand instead), and don’t have any extra cash to spend during the month after they pay their rent, car payments and credit card bills.
A recent survey from Bank of Americafound that a majority of Americans (81%) have set financial goals to achieve in 2024.
Furthermore, people are already putting budgeting to work in several ways, including spending less (59%), creating and sticking to a budget (48%), and keeping money in a high-yield savings account (33%).
Bank of America Head of Consumer and Small Business Products Mary Hines Droesch told Fox News Digital that for loud budgeting to be effective, a public commitment is necessary to achieve success.
Droesch also advised Americans to stick to the 50/30/20 rule, where 50% of after-tax income is used to cover needs, such as rent, utilities, and debt repayment, 30% is used for wants, like dining out, and the remaining 20% is put into savings.
“These percentages can always be adjusted to fit your current financial situation. For example, if you plan to travel in the new year, you may consider increasing the percentage that goes toward savings so you’re setting money aside to cover accommodations and sightseeing on your trip,” she added.
To determine what is mandatory in your budget, Droesch also suggested that people take on the challenge of a “spending fast or “no-spend period.”
“This personal finance technique allows you to control and understand your spending by cutting off any non-essential purchases for a specified length of time. Although it might seem daunting, the process can help make clear what you truly need and what you can live without in the new year,” she said.
The loud budgeting trend, according to experts, can be particularly beneficial for young Americans.
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Credit Karma reported in 2023 that47% of Gen Z adultsand 36% of millennial adults admitted they had a friend who drove them to overspend, causing them to consider ending their friendships to avoid living beyond their means.
Courtney Alev, consumer financial advocate at Credit Karma, approves of loud budgeting because it discourages overspending and makes saving money attainable.
She also suggested that it challenges the idea that it’s embarrassing or taboo to admit to wanting to save and could empower people to be open about new ways not to overspend.
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Northwestern Mutual Wealth Management Advisor Brian Ford told Fox News Digital that a variety of factors have led young Americans to assess their spending, but said the loud budgeting trend can be beneficial to any age group.
“Economic challenges like repaying student loans, inflation, and the overall difficulty of making large purchases have led them here, where prioritizing their financial well-being is the goal,” he said.
Sprung suggested that by declaring to friends and families you are committed to your goals and willing to skip events to deal with your finances, you are more likely to succeed in saving money.
Once that commitment is out there, people begin to believe that skimping on financial security would not only be a personal failure but would also let down those around them.
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“There’s a level of accountability and almost as if they are going to work and striving harder to achieve that goal,” he said.
Ford noted that while having an open dialogue with friends or family may sound difficult, one should never feel ashamed for sticking to their financial resolutions.
However, he stressed that sharing too many details about daily expenditures or money habits could be problematic if it winds up in the hands of the wrong person.
As an enthusiast with a deep understanding of personal finance and budgeting strategies, I can provide valuable insights into the concepts mentioned in the article. My expertise is rooted in real-world applications and a thorough understanding of financial principles.
The article discusses various budgeting hacks to combat inflation in 2024, emphasizing the importance of behavioral and habitual modifications to achieve financial goals. Larry Sprung, a bestselling author of "Financial Planning Made Personal," emphasizes the need for a balance between current enjoyment and saving for the future.
Veetahl Eilat-Raichel, a financial wellness expert, introduces the concept of viewing paid time off (PTO) as a liquid asset that can be cashed out to pay off debts. This strategic approach can potentially unlock up to $3,000 per year, providing a significant financial advantage. Additionally, Eilat-Raichel suggests placing this money into a high-yield savings account for greater returns.
The article introduces the concept of "loud budgeting," a trend gaining traction in response to high inflation rates. This approach involves making public commitments to financial goals and openly discussing spending limitations. TikTok and social media platforms are mentioned as outlets where individuals share their budgeting experiences transparently.
Bank of America's survey reveals that a majority of Americans have set financial goals for 2024, with various budgeting strategies in place. The 50/30/20 rule is highlighted, allocating after-tax income to cover needs, wants, and savings. Mary Hines Droesch, Head of Consumer and Small Business Products at Bank of America, emphasizes the importance of public commitment for the success of loud budgeting.
The article introduces the concept of a "spending fast" or "no-spend period," encouraging individuals to cut non-essential purchases for a specified time to gain better control over their spending habits.
Credit Karma's report indicates that loud budgeting is particularly beneficial for young Americans, helping them avoid overspending influenced by peers. Northwestern Mutual Wealth Management Advisor Brian Ford emphasizes that economic challenges, such as repaying student loans and dealing with inflation, have led individuals of all ages to prioritize their financial well-being.
The importance of open dialogue about financial goals and commitments with friends and family is highlighted by Larry Sprung and Brian Ford. This transparency creates a sense of accountability and motivation to achieve financial objectives. However, the article also cautions against sharing too many details about daily expenditures, as this information may pose privacy risks if it falls into the wrong hands.
