Zero-Based Budgeting: A Simple Method That Keeps You in Control

Ever look at your bank account and wonder where your money went? You’re not alone. That’s where zero-based budgeting comes in. It’s a simple, hands-on method that forces you to be intentional with every dollar—and it works whether you’re living paycheque to paycheque or trying to build serious savings.

What Is Zero-Based Budgeting?

Zero-based budgeting (ZBB) means giving every dollar a job.At the start of the month, you plan where every single dollar of income will go—until your balance is exactly zero on paper.

That doesn’t mean you spend every dollar. It means you’ve told it where to go:

• Savings

• Rent

• Debt payments

• Groceries

• Insurance

• Investing

• Even “fun money” or takeout

Your income minus your expenses = $0That’s a zero-based budget.

Why It Works

Built-in awareness: You’re forced to look at where every dollar is going.

Eliminates mindless spending: You don’t spend what you didn’t plan.

Great for irregular income: Freelancers and side hustlers can still plan based on what’s coming in.

Puts you in control: You stop reacting to your money and start directing it.

How to Set Up a Zero-Based Budget (In 5 Simple Steps)

Step 1: Know Your Income

Start with your after-tax income—what actually hits your account. Include:

• Job income

• Freelance or gig work

• Child benefits or GST credits

• Side hustle money

If your income varies, use your lowest or average month to stay realistic.

Step 2: List All Your Expenses

Break them into categories:

• Fixed: Rent/mortgage, insurance, phone bill

• Variable: Groceries, gas, entertainment

• Periodic: Gifts, vet bills, annual memberships

• Financial goals: Savings, debt, investments

Don’t forget irregulars—these are what usually throw people off.

Step 3: Assign Every Dollar a Job

Start filling in your budget categories until every dollar is spoken for.If you still have extra left? Great. Send it to:

• Emergency fund

• Credit card debt

• Future expenses

If you're short? Cut from flexible categories like entertainment or eating out.

Step 4: Track Spending as You Go

This is what separates a real budget from wishful thinking. Use:

• A spreadsheet

• Budgeting apps like YNAB (built on ZBB), Monarch, or EveryDollar

• Pen and paper—if that’s your thing

Match every expense to a category. If you overspend in one, move money from another.

Step 5: Adjust Monthly

Each month is different—birthdays, car repairs, or travel. Adjust your categories as needed but always zero out your budget again.

It’s flexible, not rigid. The goal is control—not perfection.

Zero-Based Budgeting in Canada: A Quick Example

Let’s say you bring home $3,000/month. Here’s what a zero-based budget might look like:

Category	Amount
Rent	$1,200
Groceries	$400
Cell & Internet	$150
Transportation	$250
Savings (TFSA)	$200
Credit Card Payment	$300
Eating Out	$150
Subscriptions	$50
Emergency Fund	$100
Misc/Fun	$200
Total	$3,000

Nothing left unassigned. That’s the goal.

Bottom Line

Zero-based budgeting forces you to make conscious decisions about your money—before you spend it. It’s not about being strict. It’s about being clear.

Once you start telling your money what to do, you’ll stop wondering where it went.