With the cost of living set to dominate the next election campaign, more Britons are being pushed into the red than ever.
Five million people across the country are now in a “negative budget” – having more money going out than coming in – compared with 3.25 million at the start of 2020, recent research from Citizens Advice shows.
It’s no wonder then that money saving trends are going viral on social media, with “finfluencers” (financial influencers) racking up thousands of followers with their tips on anything from buying a house to spending less on flights.
They’re feeding the demand from cash-strapped Gen Z’ers in particular, with 25 per cent of 18 to 24-year-olds in the UK turning to social media for financial guidance, according to Deloitte.
Budgeting techniques including cash stuffing, the 1p challenge and loud budgeting, are becoming as common on TikTok and Instagram as outfits of the day and get ready with me posts.
Finfluencers are good at, not only popularising different budgeting techniques but also inspiring people by creating momentum around a challenge, says Kim Uzzell, a financial coach who runs the consultancy My Money Movement.
“Often with our finances, we know we should do more, but we don’t really know how to do it. These challenges are all very doable, and very effective, if they are maintained. One of the best ways to do that is to put it out on social media and say, ‘I’m gonna do this – is anybody with me?’” says Norwich-based Uzzell.
Below i outlines some of the latest budgeting trends and how you can implement them.
Cash stuffing
Cash stuffing is the practice of withdrawing the majority of your money each month and distributing different amounts across a dozen or so envelopes labelled with individual spending categories.
Read Next
Pensions and Retirement
Money ClinicI'm 25 and have just started work. How big a state pension will I get?Read More
For example, they could cover expenses like the weekly grocery shop, occasional takeaways as well as treats for the children like coffee and cake outings, birthday party presents and sporting events.
Uzzell said that equally important were the envelopes that covered self-care.
“It wasn’t just about paying the bills or making sure that the children were okay. One of my priorities was putting away £15 every week towards my haircut that I would have every six weeks. I had that envelope, I could see it and it was tangible. There was no way that I was going to dip into that money to pay for a bottle of wine because my priority was my haircut.”
Cash stuffing can also be done digitally, setting up folders in your online bank account and distributing the designated amounts electronically. But it only works if you don’t move things around if you change your mind.
No-spend challenges
Laura Pomfret, co-founder of the female-focused financial advice platform Financielle, a community of 104,000 TikTok and 17,000 Instagram followers, reveals that “no-spend challenges” are a trend that have taken off.
These are when you pick a set period to spend only on essentials. They work like a kind of detox where you can reset bad spending habits and they can help you reach a goal quickly, says Pomfret.
“This really can help people who have impulsive spending habits – our members that emotionally spend or who are addicted to overspending benefit from this cold turkey approach. It can help to break the cycle and also help them to focus on a dopamine hit when they don’t spend,” she says.
“Everyone’s rules could be different. It can include events that are already planned and in the budget. The fact that people are documenting it on social media and it’s becoming a trend makes it more achievable.”
No spend challenges require preparation, communication and discipline, especially if you have children. Pomfret admits she has found them difficult and will be more likely to break the challenge if she hasn’t planned things like shopping and free activities in advance.
“It’s easy to just throw money or a screen at children to keep them quiet, and they get so addicted to that, it’s no wonder they feel they have to have something, so breaking that cycle can be beneficial,” says Pomfret.
“But you don’t want to push financial pressure on to children and keep saying you can’t afford things. We have to be very careful about how we manage budgeting with children.”
The 1p challenge
The “1p challenge” – where you save 1p on the first day and keep adding 1p on to the amount each day for a set time, has also been making the viral rounds.
Bloggers like Skint Dad claim you can save around £668 in a year following this method.
It is easier if you can set it up automatically with your bank, transferring your saving into a connected savings pot, but otherwise, the amount of time it takes to make a real difference can lead a lot of people to abandon it out of boredom and lack of motivation.
However, it is one of the easiest to complete so may be worth it for those who find it hard to save.
The 100-day challenge
Similar to the 1p challenge, but often seem as more impactful is the 100-day challenge.
The TikTok trend has had millions of views of finfluencers documenting the process.
As part of the challenge, savers take 100 envelopes and write the number 1 to 100 on them. This number is the number of pounds they will need to add to the envelope.
Each week, the saver picks out two envelopes at random and puts the amount shown on the front into them. In 50 weeks, they will have saved £5,050.
While perhaps not a long-term method for many people, it could be useful to save for big-ticket items with a short deadline, for example, needing a new car, or paying for an upcoming holiday.
Loud budgeting
Loud budgeting – being upfront and transparent about your financial limitations and goals – can go against the grain of the inherent politeness of being British where conversation about money can often be seen as a taboo subject.
But those practising and preaching it are helping normalise not having to keep up with social norms or pressures to spend.
The term was created by New York-based TikTok creator Lukas Battle. In a video posted on 30 December, 2023, he said, “It’s not, ‘I don’t have enough,’ it’s ‘I don’t want to spend.’”
The idea of loud budgeting is that it takes away the stigma of talking about money and dispelling any feelings of shame or discomfort surrounding the topic.
“Changing the language from ‘I can’t afford it’ to ‘I’m not doing it because I’m choosing to put my money towards my house deposit, or I’m choosing to put tires on my car this month’, or whatever it might be, makes it empowering, rather than coming from a place of lacking,” Uzell says.
