To Mute Your Spending, Make a Loud Budget

livemint.com:

Luria Freeman called off her 30th birthday festivities with a public display of financial planning. “I have a few big financial commitments coming up this year and canceling London became the most responsible choice (boo adulthood)," the New York-based producer messaged her friends Jan 2. in a group chat, including the eight who had already said they would book the four-day trip.

There would still be a party, but a modest one. Making a public declaration to rein in spending helps tighter budgets stick, Freeman and other proponents say—an idea supported by behavioral economics research. An added function: Using personal finance as an excuse to back out of plans with friends can help you save face as well as money.

The practice, which gained currency on social media in recent weeks, was also given a new name: loud budgeting. “There’s something to the idea of sharing financial constraints or saving intentions in a more open way that can be useful and good," said Scott Rick, an associate professor of marketing at the University of Michigan, who has studied what makes people overspend. With prices and interest rates still high, credit-card balances ratcheting up and savings dwindling, financial advisers say it is more important than ever to resist temptations to overspend.

By going public with austerity plans we will feel greater pressure to follow through, behavioral finance researchers say. It is also an easy way to steer friends or family to less expensive activities or gifts. Sharing your financial goals and obligations with others serves as a commitment device, a strategy to make it harder for yourself to bail on your financial goal, Rick said.