LOGGING onto her bank account, Fiona Bradley’s stomach used to drop when she saw her £0 balance – but now she says it leaves her feeling empowered.
The mum-of-two from Glasgow is saving £400 a month thanks to a new viral savings method that empties her account of cash, after getting sucked into £10k worth of debt trying to live paycheck to paycheck.
Some four million people are trapped in a negative budget, just like Fiona, which is when your income doesn’t stretch to cover the cost of bills, according to an urgent warning issued by Citizens Advice this week.
These households have racked up an average debt of £9,963, the charity said.
With millions under financial pressure, many are turning to the social media craze zero-based budgeting, or ZBB, to get their finances back on track.
Zero-based budgeting means that you must account for every single penny of your income.
You list your income and then your expenses broken down into categories, including your rent, bills, food shop, transport and holidays – and factor in how much you’re putting into savings too.
The goal is to get to zero, so that every penny has a purpose and every expense is budgeted for.
The method was invented in the 1970s by an accountant called Peter Pyhrr to help businesses balance the books – but now it has exploded on social media as a way to help manage household finances.
Just one video alone created by the Instagram account Mindset.Therapy which explains the method has racked up 14.2million views, while another by American personal finance expert Dave Ramsay has 2.4 million views.
On TikTok, there are entire accounts – like Zerobasedbudget Cindy, who has clocked up 19.6k likes – dedicated to the trend.
Sarah Pennells, consumer finance specialist at Royal London, says: “Zero-based budgeting can be a game-changer.
“It makes you hyper-aware of where your cash is going, helps cut waste, and ensures you spend on what matters most.
ZBB helped cure my reckless spending
Primary school teacher and mum-of-two Fiona, 38, from Glasgow, stumbled across the method in July while scrolling on TikTok looking for help tackling her debt.
Her and her husband Clancy’s finances were under strain because of a home renovation which went £10,000 over budget.
They borrowed £4,000 from a family member and also took out a £5,000 interest-free loan to pay for it.
Fiona, who earns £28,000 a year, was also spending between £200 to £300 a month on Klarna clothes hauls, and said she had a “reckless” impulse to spend money.
“I used to use Buy Now Pay Later all the time,” Fiona said. “I was just buying clothes for myself online and things like clothes and toys for my kids, and thinking, ‘ I’ll worry about it later’.”
Buy Now Pay Later is a type of short-term credit that lets you delay your payments, usually by splitting a purchase into smaller instalments.
While it can offer some short-term breathing space, the payments can quickly snowball if you keep using it and it can be hard to keep up.
If you miss a payment, you can start incurring fees or charges and impact your credit score.
But Fiona says it’s easy to get trapped in the BNPL cycle.
“When you’re feeling stressed and upset because you’re struggling with money, that then becomes a trigger to spend again,” she said.
Thanks to zero-based budgeting, she has quit her £300-a-month Klarna splurges and £80 trips to coffee shops, saving her around £400 a month on average.
So far, she’s saved £1,500 thanks to the budgeting method – which she has used to slowly pay off her debt.
She’d already paid off £1,000 of her debt to bring it down to £9,000. Since starting zero-based budgeting, she’s now managed to reduce it further to £7,500.
She says: “It’s honestly transformed how I manage my money.
“For the first time in my life, I feel in control of my money, not stressed.”
How does she do it?
On payday, Fiona leaves a small buffer of £300 to cover direct debits for bills like her joint mobile phone contract and credit card repayments, then moves most of the money over into her Monzo account.
Monzo has a feature that lets you create up to 20 different “pots” where you can keep money separate for different purposes.
Fiona divides her money up into 20 different pots, including £100 towards petrol, £50 towards clothing for her two children, Remy, 3, and Max, 1, and £200 for Christmas.
By the time she has moved her money into each pot, she’s left with zero pounds in her main current account. Putting money in her pots makes her think twice about spending it, because she has to move it out in order to access it.
Fiona says: “The old me used to feel awful when I saw zero pounds in my account.
“I used to have a constant feeling of dread and worry about how I was going to manage the next few weeks.
“Now, when I see zero pounds, it’s empowering because I know that all that money is actually there and has been accounted for.”
Thanks to zero-based budgeting, Fiona has even managed to build up £600 for Christmas – including presents, food and clothing.
“I don’t deprive myself of anything, I just plan for it,” she says. “It’s about being intentional. And if I can do it, anyone can.”
How to cash in on the craze and make £400 in time for Crimbo
If you’re struggling to save for Christmas, try zero-based budgeting.
Rajan Lakhani, personal finance expert and head of money at smart money app Plum, estimates that you could save £400 between now and the big day using the method.
Consider setting up a bank account that lets you sort your money into instant-access pots if you don’t already have one.
Monzo, TSB, Starling, Revolut, Chase and NatWest let you do this – although each has different limits on how many you can create.
For example, Monzo lets you have up to 20, while TSB only lets you have five.
If you’re struggling to pull together a budget plan, try a zero-based budget app, Goodbudget.
It’s a useful planning tool to help you figure out how much money you need to put in pots – although it uses an “envelope” system instead.
It’s handy if you’re sharing bills with a partner, as you can share your budget plan with another person. The free version lets you set up to 10 envelopes.
Beware that the method doesn’t easily account for unplanned expenses.
Rajan says: “If you need to book a last-minute train for an emergency or pay a sudden vet bill, it can be tricky if all your funds are already allocated, potentially pushing you into your overdraft.”
As a solution, create an “emergency fund” pot and save as much as you can in there.
Four more viral budgeting methods you can use
ZERO-based budgeting isn’t the only money-saving trend blowing up on social media.
No spend challenge
Thousands of people are also trying out “no spend” challenges.
These challenges involve picking certain days where either you don’t tap your card at all, or you choose not to spend on anything “non-essential”.
You could decide to do it just for a day and see how it goes, or you could do it once a week or once a month.
Or, you could take it further and try it for a whole month.
Cash stuffing
This budgeting method involves physically dividing and withdrawing cash into separate envelopes for different spending categories.
You could have categories such as food, fuel and bills.
The method means you can keep track of how much cash you have for each purpose and avoid going over budget.
Reversing the lifestyle creep
A new TikTok trend also encourages people to cut out “lifestyle creep”.
This creep is how you can gradually slip into living beyond your means and enjoying a lifestyle that’s more suited to someone on a higher salary than your own.
The trend involves cutting out things like beauty treatments, new clothes, gym memberships, takeaway coffees and meals out.
Round ups
Plenty of banks including Starling, Monzo and NatWest have round-up features that save away money every time you spend.
If you spend £1.20, for example, it will round up to £2 and automatically put away 80p into a separate savings pot.
The trick can help you save without even noticing.
