Zero-based budgeting going viral on Tik Tok - is it any good?

How does zero-based budgeting work and is this cash-only method a good way to budget? We asked the money experts

Woman moving coins from stacks into a glass jar
(Image credit: Getty images)

If you prefer to budget with physical cash, this might be your sign to find out how zero-based budgeting works and to join in on the viral trend. 

More people are budgeting with cash instead of using current accounts and savings accounts, which is why zero-based budgeting is going viral on TikTok alongside other cash budgeting methods like the 1p challenge and cash stuffing.

Here, we explain how zero-based budgeting works and reveal what money experts think of it.

What is zero-based budgeting?

In a nutshell, zero-based budgeting is when you allocate your yearly, monthly or weekly income into specific categories so you’re left with ‘zero’. 

Essentially, all of your money for that week or month is allocated to something, so your income equals your outgoings. For example, if your income for the week is £400, your expenses should also total up to £400 so you’re left with zero. 

This way of budgeting is meant to help you stop overspending and limit you to the amount of money in that specific category. 

But for it to work, you have to be strict on yourself. If you find you need more money in let’s say the ‘eating out’ category and you spend £50 extra than what you allocated, your left with minus £50. 

You do have the option to make it right, for example move £50 from another category into your ‘eating out’ pot, so you’re not overspending and back at zero. 

If you don’t have the option to re-shuffle money into another category but you find you’ve overspent, it’s a call to make extra money. 

Good ways to make some extra cash include selling clothes on marketplaces like eBay or Vinted, download apps that pay you to walk or see if you can rent out your driveway

How does zero-based budgeting work?

Break down zero-based budgeting into these steps to make things simple. For the sake of this example, we’re going to work with a monthly income of £2,000. 

  • Get a piece of paper, a book or something to write on and note down your monthly income at the top. 
  • Then on the left hand side, make a list of all of your outgoings/ expenses. For example, Rent, energy bills, food shopping, Netflix subscription, fuel, social and savings. 
  • On the right hand side of your list, allocate a budget next to each pot. Remember, whatever you put it that pot should keep you going for the coming month. 
  • It’s a bit like trial and error- after allocating your budget to each pot, add up all of your pots and write the total and the bottom on the right hand side. The budget total and your income total should come to the same number. If it doesn’t, you need to either add more or get rid of some money within the specific pots until it equals each other out. 
  • Once it’s equal, you’re ready for the month ahead. In the first few months, you will see what works and doesn’t work for you, and you can make those changes for the following month. 
  • Here’s an example of the above steps if you earn around £30,000 per year, giving you a £2,000 take-home income, after tax each month.
Swipe to scroll horizontally
Category Money pot
Energy bills £200
Food shop£400
Netflix £6.99
Gym membership£30
Fuel £160
Total £2,000

Now that your £2,000 income has all been allocated into pots, you should be left with ‘zero,’ or in other words, nothing. 

If you find you overspend in one pot which puts you in minus, you can move money between the pots if needed. While it’s flexible, the less you move around the less messy it gets.

What Tik Tokers are using the zero-based budgeting method?

Give ‘zero-based budgeting’ a search on Tik Tok to find other people budgeting in this way and, people love sharing their personal experiences and tips. 

Charlotte | @savelivethrive



Charlotte talks about different budgeting techniques and offers advice on how to build your wealth.

Lissa Prudencio | @wealthforwomenofcolor



Lissa advises on everything from budgeting to saving and investing.

Taylor | @taylorbudgetss



Taylor hops on a lot of the cash budgeting trends and shares her journey, including the zero-based budgeting method.

Is zero-based budgeting a good way to budget? We asked the money experts

We got some input from the money experts on what they think about zero-based budgeting. 

Nicole GarciaMerida, Staff Writer at MoneyWeek said: “I can see in theory how it would work for some people, but my expenses vary greatly so I would find it hard to allocate funds to specific things. 

If I were to try zero-based budgeting, I could see myself constantly pulling funds out of one pot and putting them into another, so it wouldn’t be worth the hassle for me personally.”

Kalpana Fitzpatrick, author of Invest Now: The Simple Guide to Boosting Your Finances and digital editor of our sister site MoneyWeek, says: “A large part of how we manage money is psychological, so it comes as no surprise that some people feel that if they have money in the bank, then they must spend it.

If zero-budgeting is for you, then make sure you allocate something to savings; work out what is affordable for you once you have allocated amounts for bills and other essential costs. I suggest this goes into a fixed savings account, where the money is locked for a certain period (often 12 or 24 months) - and that way, you can’t touch it. 

If it helps, give your savings account a name - holiday fund, for example. But whatever you do, don't just spend it all without accounting for saving some of it.”

What is your money personality and how can you become a budgeter?

Knowing what your money personality is can help you see if you naturally like to budget and save. If it’s not in your blood, here a some tips from Aqua on what you can do to start your budgeting journey. 

Spenders- Spenders like to spend. You don’t plan or budget which leads to overspending and when you spend it boosts your seld-esteem. As a result, you end up in a pile of debt. 

Tip- Assess your finances at the beginning of the year or the month and work out a plan on what you can afford to spend on non-essentials. If you do this, you’re half way there to zero-based budgeting, so it could be worth a try if you follow the steps above. 

Avoiders- You avoid talking about money because of the anxiety it gives you. You’re rarely on the look out for deals, saving or investing. You also avoid checking your bank account which could mean your credit score suffers if you don’t know what you’re spending.

Tip- Start by taking the first step and checking your bank account. If you can work out smaller goals to make small differences, they will add up and as a result you will be in a better financial position then you were. 

Worriers- Although worriers worry about spending which is a good thing when it comes to saving money, you over-complicate money decisions and fear you will regret spending the money. 

Tip- Make a plan to check your spending once a month or once a week to start with, so you can keep a tab on your spending without it keeping you up at night. 

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Vaishali Varu
Staff Writer

Vaishali graduated in journalism from Leeds University. She has gained experience writing local stories around Leeds and Leicester, which includes writing for a university publication and Leicester Mercury. 

She has also done some marketing and copywriting for businesses.

When she is not writing about personal finance, Vaishali likes to travel and she's a foodie.