Loud (and Proud) Budgeting May Help You Stick To Your Saving and Investing Plan

By Lori Schock, Director of the SEC’s Office of Investor Education and Advocacy

The term “loud budgeting” is getting some attention. The general idea is to create a budget and make the plan “public” to help reinforce your own financial decision making and gain support from your inner circle, so you have a better chance of sticking with it. This concept can be an empowering way to take control of your financial future.

First, identify your financial goals and create a plan that helps you achieve those goals. A good place to get started is to check out the free financial planning tools and resources on Investor.gov. Think about what truly matters to you and what motivates you to save. Your budget should include all your monthly expenses, including necessities, such as living expenses and discretionary expenses, such as entertainment. Some goals may include paying off high-interest debt or student loans, saving for a house, putting money into an emergency fund, and planning for retirement.

Once you create your saving and investing plan, consider being loud‒and I’m going to add proud‒about your plan and goals. Oftentimes, when we say something out loud, it sinks in better and stays with us. Creating a saving and investing plan that helps you meet your financial goals and sharing those ideals and goals with your family and friends may not only help you stay more committed to your decision-making but can provide you with support to help you stick with your plan for the long term. It can also make talking about finances more comfortable. When I say “loud and proud” it’s important to be considerate when sharing your plan. Always remember your audience when discussing your finances and remember at the end of the day this isn’t about preaching to others about money. It’s about reinforcing good money and investing habits for yourself.

Let’s face it. There are a lot of temptations to spend money rather than save and invest for your future. We’re constantly inundated with commercials, ads and emails encouraging us to take a trip of a lifetime, buy the newest car or splurge on high-tech gadgets. Due to social media, we’re also able to get a front row seat into the lifestyles of the rich and famous, which only adds pressure to buy what they’re buying and spend money at every turn.

Although they have the best intentions, our friends and family may reach out to include you in their fun-filled activities that could cost you a pretty penny. By sharing your saving and investing goals with them, they will not only better understand why you may not be able to join them, but they could help support you and keep you on track to achieve your financial goals. Being loud and proud with your investing plan could reduce your impulse spending and help even alleviate anxiety as you will no longer have to make up excuses about why you can’t go on that extravagant trip or buy that $200 concert ticket!

With courage of your convictions and strong support, being loud and proud with your saving and investing plan may be a great option to help keep you on track with your plan for the long term. Plus, you may even inspire those around you to create their own loud and proud investing plan.

Note: Director’s Take articles are written in a short, non-legalese format intended to provide you with tips and information on timely investment topics that are important to you. You can subscribe to receive Director’s Take articles or find our latest article on the Director’s Take spotlight page.

This article is provided in the author’s official capacity as the Commission’s Director of the Office of Investor Education and Advocacy but does not necessarily reflect the views of the Commission, the Commissioners, or other members of the staff.