Jodie Wilkinson, Head of Strategic Partnerships at takepayments has supplied the expert comment below on how small businesses can learn from this viral budgeting trend:
“After the added expenses of the festive period, frugality and budgeting often come to the forefront of consumer’s minds in January. This year has been no different and the “Loud Budgeting” trend has been sweeping across social media platforms.
This financial trend is being defined as an unapologetic and transparent “celebration of thriftiness”. Financial strategies should prioritise the allocation of funds towards future investments and the achievement of personal goals.
Although “Loud Budgeting” is currently being utilised by consumers, there are certain aspects of the trend that business owners could think about incorporating into their financial strategies:
- Transparency with customers – “Loud Budgeting” is centred around consumers being honest and unapologetic about their frugality and the same could go for business owners.
A recent survey we conducted discovered that 2 in 5 business owners are concerned about staying profitable in the next 12 months. It’s become common to see businesses decide to increase their prices or reduce their product offering to combat rising costs and it seems honesty is the best policy.
With a rise in independent businesses closing, many consumers are trying to actively support local businesses. If businesses aim to be transparent with their customers about the reasons behind changes and their financial limitations, this could help to combat reputational damage, maintain customer loyalty and encourage shopping small over large companies. The challenges of current economic conditions are something many customers will be able to understand and relate to.
- Overestimate – “Loud Budgeting” prioritises future planning. To avoid a budgeting headache, a clever workaround could be to always over-forecast your bills by 10% as part of your planning. That way, if an expense is higher than anticipated, you’ll have a contingency pot ready and waiting to cover the cost and your budget won’t take the hit.
- Robust planning – The life of a business owner is busy, often leaving little time to devote to meticulous financial strategies on a regular basis, but the “Loud Budgeting” trend is centered around planned and intentional spending. It’s a good idea to go back to your budgeting plan regularly, once a month if possible or every other month, and check what costs are higher or lower than expected, and make adjustments for future months where necessary.
- Have an emergency fund – “Loud Budgeting” is all about ensuring the allocation of funds for future investments so remember to look ahead. No one knows what the future holds, so it could be a good idea to plan for a rainy day. You can do this by starting an emergency fund while times are good and you may have more disposable income than usual.
- Compare and save –“Loud Budgeting” rejects unnecessary spending sowhether it’s your electricity, water, or internet, there could be cost savings to be made by shopping around, using comparison services and getting the most bang for your buck. All these savings can be funnelled right back into your budget.”