Are you ‘loud budgeting’ or ‘doom spending’? Finance according to gen Z

If there is one subject the US education system bungles more than sex ed, it’s financial literacy. I never once learned about insurance, credit card debt or what a 401(k) is. The only lecture I remember getting on the topic of money came from a gym teacher who, while going through a divorce and midlife crisis, thought it wise to show a group of eighth graders how to float a check. A useful skill, maybe, except that no one uses checks any more.

Unless you have an accountant parent – or a trust fund – you might learn about investments, budgeting and taxes from strangers online. A Forbes Advisor survey conducted last year found that 79% of Americans between ages 18 and 41 hit up social media for financial advice. It’s a particularly booming business on TikTok, where professionals dole out lessons on personal finance. (One hopes these content creators are professionals; some are former finance majors and self-help authors, while others simply market themselves as guides.)

Gen Z has rebranded the historically dry topic of money management with cute viral terms, reclaiming the world of financial literacy from overly corporate types. You may have heard of some: “loud budgeting”, “soft spending”, “cash stuffing”. There’s a great deal of anxiety wrapped up in them; any concept called “money dysmorphia” or “doom spending” can’t be good, after all.

It makes sense that a generation obsessed with wealth (or their lack of it) would want to place labels on their collective financial malaise. One survey found almost a quarter of 18- to 24-year-olds believe they will never retire. They came of age during a cost-of-living crisis and depressing housing market. So why not have fun when describing lack of savings or student loan debt?

The new language of money

The TikTok comedian Lukas Battle coined the term “loud budgeting” as a “new trend” for 2024, advising viewers to cancel plans or put off major purchases they can’t afford – and be unashamed of their thriftiness. “It’s not, ‘I don’t have enough,’ it’s ‘I don’t want to spend,’” Battle said in a TikTok, adding: “If you know any rich people, you know they hate spending money. So it’s almost more chic, more stylish, more of a flex.”

It was half advice, half a joke – but commenters ran with the idea. “Quiet luxury is out and loud budgeting is in,” one wrote. In the words of another, “This is so recession core.”

Battle’s video was viewed 1.5m times, and the term landed in headlines from CNBC, Fortune, and the New York Post. “Loud budgeting is a financial strategy where you share your money aspirations directly and not so quietly with the people in your life,” the financial adviser Derek Ober told HuffPost. That’s a lot of words to essentially say “don’t spend more than you earn”.

I prefer “doom spending” to “loud budgeting”, as it feels very baroque and carries the net goal of me buying more stuff. Girls have been calling this “the shopsies” for years: when things get bad and no therapist takes your insurance, the only cure to your big sads is buying new shoes, or a $75 candle, or a Goop-approved, sculptural vibrator.

All signs point to “doom spending” being a reckless and unwise decision, but it does feel fun to self-soothe via unnecessary purchases. And it’s a problem many Americans have. Despite inflation and high interest rates, the National Retail Federation reported that holiday shopping reached record highs last year, at a cool $964.4bn.

Perhaps a better compromise lies in “soft savings”, an offshoot of gen Z’s beloved “soft life” craze, which favors a gentle, easy existence over the hustle and grind.

“Soft savings” adherents preach using finances to support one’s quality of life – travel, for instance, or on expenses related to a hobby or goal. They say it’s good to save but better to prioritize a life well lived over money in the bank. All well and good, but it’s the sort of breezy ethos I expect to hear from someone at a party who would say they grew up merely “comfortable”, not “upper class”.

Related: Forty-four of 50 US states worsen inequality with ‘upside-down’ taxes

“Cash stuffing”, which I believe has been around for as long as grandmas have existed, is a new name for the longtime practice of putting cash in envelopes marked for different things – rent, food, clothing, fun – and only spending as much every month as you can afford to put in the envelope. It’s helpful to use cash, some argue, as the physical stuff feels more tangible than money sitting away in a bank account. (Another example of gen Z believing it’s invented an age-old concept.)

I’m not sure what to do with “money dysmorphia”, a take on the very real body dysmorphia, a mental health condition in which people have a distorted and obsessively negative image of their appearance. It feels gross to associate that with a wealthy person’s inability to realize they are in fact rich (or vice-versa), but that’s essentially what “money dysmorphia” means.

According to Business Insider, half of people who make more than six figures reported in a survey that they’re living paycheck to paycheck, despite living well above the country’s median income. Another report from Bloomberg found that a quarter of survey respondents who made at least $175,000 a year described themselves as “very poor”, “poor” or “getting by but things are tight”. This could be categorized as money dysmorphia, and while it might stretch the limits of empathy, it does point to a darker truth: if things are this bad for the privileged, what chance do the rest of us have?

Learning this new financial vocabulary probably won’t catapult me into a higher tax bracket. The wiser advice, like loud budgeting and cash stuffing, seems like second nature. Maybe the best thing these terms can teach is that Americans desperately need mandated financial literacy classes – and not from TikTok.