From girl math to loud budgeting, social media has gone through its fair share of financial trends. The latest one, however, may have some staying power.
Known as moneymaxxing, this new fad focuses on making the most of, well, your money. “While the tactics can vary, the underlying goal is simple: Make sure every dollar is doing as much as it reasonably can, so you’re able to put your money where it really matters,” said Northwestern Mutual. Here’s what to know.
What is moneymaxxing?
In short, moneymaxxing “encourages people to maximize their budgets by trimming recurring expenses, redeeming rewards points — a related trend known as ‘pointsmaxxing’ — and stashing extra cash in a high‑yield savings account,” said CNBC. Other actions aligned with the movement might include evaluating how you are allocating your money and setting clear financial goals.
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Admittedly, the concepts that moneymaxxing espouses are not really new, though social media has given it a fresh spin and name. “It’s kind of like the FIRE movement — financial independence, retire early — but gamified. It makes saving feel like something you can do without going the normal route,” said certified public accountant and financial planner Felicia Greenwald to Parade.
Why is moneymaxxing getting popular right now?
The rise of moneymaxxing may have something to do with the financial reality many Americans are currently facing. “Largely because of rising costs, young adults are having a hard time making it on their own,” said CNBC, with many still relying on their parents and viewing financial independence as a far-off prospect.
Moneymaxxing “helps close these gaps by encouraging people to pay more attention to their finances,” said Northwestern Mutual. From there, they can start to make more meaningful, intentional decisions, whether that means focusing on paying off debt, building an emergency fund or saving enough for a rental deposit.
The social aspect of the trend can also be motivating. “When those numbers are real, and people are talking about real figures, it’s easy for people to understand and not feel so alone in their own financial struggles,” said Greenwald.
How can you start moneymaxxing?
Moneymaxxing is a trend — but it can also be a smart way to maximize the funds you have, making the most of your financial situation no matter what it looks like. A great first step into moneymaxxing is to get a handle on how much money you have going in compared to how much is going out, and where specifically that money is going. You can then use that information to identify what is and isn’t working as efficiently as it could be.
The next step is to determine your financial priorities. “Whether the objective is to reduce debt or build a savings cushion, having a clear milestone can help you stay motivated,” said Jack Howard, the head of money wellness and behavioral finance expert at Ally Bank, to CNBC.
Finally, there is the task of figuring out how to actually achieve your financial aspirations. You might consider breaking down intimidatingly lofty goals — like building an emergency fund with six months of expenses — into smaller, more manageable chunks, like aiming to set aside a small amount each month. Financial tools can also help offload some of the work, whether that is choosing a budgeting app to help you stay on track or using automation to ensure consistent transfers to savings.
