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The Joy of Zero-Based Budgeting

By Catherine Pope

July 5, 2020


Wouldn’t it be good to throw our budget out of the window? Well, that’s what happens with zero-based budgeting. Rather than using last month’s figures as a basis, we start afresh. While this might sound like a lot of work, it forces us to think through this expenditure. Do I really need to spend £30 on pens? Or is there any way I could pay less for my mobile phone and have more cash for fancy gin?

Tools like You Need a Budget (YNAB) have this feature built in and there’s no such thing as a rolling budget. You could simply copy across last month’s figures, but that’s missing the opportunity to be intentional about finances. We make a conscious decision about every penny spent, rather than just wondering where on earth it’s all going.

Greg McKeown explains in his book Essentialism that we can adopt this approach with our time, too. Do you have any supposedly fun commitments that have become a chore? Are they still worth the expenditure of energy? Lockdown has given us the unwelcome but useful opportunity to reconsider our activities and what’s actually important to us. As McKeown says, “if it no longer fits, eliminate it altogether.” Whether it’s spending time or money, it’s always worth starting from zero.

Photo by Carlos Muza on Unsplash

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