A financial expert discusses how telling people close to you about your financial goals helps with accountability.
CHARLOTTE, N.C. — One way people deal with rising costs is to spend less. It sounds easy, but it can be hard at times.
Mark Henry, CEO of Alloy Wealth, explained how “loud budgeting” can be a good tool to help people stick to a budget.
“It’s called ‘loud budgeting’ because now you’re expressing your goals to other people,” Henry said.
The financial expert said the idea behind that is twofold. The first is to hold yourself more accountable.
But others can help you as well.
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“When they ask you, ‘Hey, let’s go out to dinner this weekend’, you’re not being rude to say no. They already know you’re trying to control your budget,” Henry said. “So they don’t think you’re being rude by not wanting to go out with them. They understand, ‘Oh, and that’s why you’re doing [it]. You’re trying to accomplish something.’ “
Henry said being clear about what you want to accomplish, like becoming debt-free, is a reachable goal if you control the dollars you do have.
As far as how long it takes to reach your goal, Henry said it depends on several factors.
“How much debt do we have? Do we have an emergency fund already? How much credit card debt do we have? What are we trying to accomplish, and then that’s going to be the timeline,” he said. “For most people, you didn’t get into the situation you find yourself in overnight. And unfortunately, you’re not going to get out overnight.”
Henry said many people are empowered by loud budgeting because it involves getting close friends and family on board. And it could be an idea that catches on.
“Sometimes it’s even contagious, they start getting involved too, or they start looking to help you do it,” he said.
Henry said the first priority for anyone should be an emergency fund. He suggested your financial safety net should be enough to cover six months of expenses.
Then, identify your financial goals.
“Write it down, do the goal setting, be realistic about it. And then you express it to others so they can help hold you accountable,” he said. “If I said, ‘I wanted to lose 10 pounds,’ that’s a dream. If I said, ‘I want to lose 10 pounds in the next 90 days,’ I just turned a dream into a goal. But the same thing is true with loud budgeting.”
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