How I follow a zero based budget

I love talking about money, as I think it's something we don't really learn about in school and unless your parents or family are particularly savvy with money (like mine!) you just really might not know where to start. There are so many people on TikTok who are on debt journeys, and while I'm thankful to not be in debt (except for my student loan...) I am also someone who sticks to a budget every single month.

What is zero based budgeting?

In particular, I use 'zero based budgeting'. According to NerdWallet, "zero based budgeting is a method that has you allocate all of your money to expenses for needs and wants, as well as short- and long-term savings and debt payments. The goal is that your income minus your expenditures equals zero by the end of the month.

The difference between zero-based budgeting and living paycheck to paycheck is that all of your financial needs are met. You can repeat expense categories and amounts every month, or mix it up.

If you come in under budget in a certain category at the end of the month, add the remaining amount to next month’s budget, or move it to another category, such as your emergency fund.

It’s the same concept as the envelope system, which involves distributing money (cash) for different expense categories into envelopes."

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How do I work out my zero based budget?

I use Monzo to budget my monthly income and most of my spending/saving. So when my salary drops into my bank on the last working day of each month, I spend 10 minutes allocating it all to where it needs to be. Currently, this looks a bit like this...

• Gifting - I put around £75 per month into a pot for birthday and Christmas gifts
• Subscriptions - I put the exact amount I need per month into a pot for my personal bills like my phone bill, Spotify, Canva and so on
• Weekly spending - I put a set amount into this pot which covers anything we need to buy throughout the week, like food shops, random Home Bargains trips, nights in the pub etc
• Bills - I put my half of our bills away in our bills account
• Other savings - depending on what we're saving for (usually a holiday) I put a really good chunk into our different savings pots, rather than all into one savings account. Currently we're renovating our bedroom and saving for spending money on our cruise, so I'm putting some in each pot
• Beauty - I typically put a standard £50 in here and keep it for when I want my hair, nails, brows etc done
• Miscellaneous - when I've moved all of this money around, I put whatever is left into a random pot for if I want to treat myself to new clothes or books or whatever 

After everything is in the pot it needs to be in, my bank account says a big fat ZERO. Then I move one week's worth of the allocated 'weekly spending money' back in to my current account to spend over the next 7 days.

How does it help?

Before I started using a zero based budgeting system, I found myself spending whatever I'd spend across the month - then it would come to the last week of the month and we'd be limiting ourselves so we could move *something* into savings before the next payday. Now, I know that everything is covered, we're able to meet our savings goals, and we have a set amount of money to spend every single week. For me, it's helped to relieve anxiety around money and I never feel like I'm living "payday to payday".

Anyone can do zero based budgeting, and it really is super simple. If you have a bank account that allows you to easily move money between 'pots' (like Monzo) then it's even easier!