03/06/2024
What is Zero-based Budgeting?
In a traditional budgeting method, the baseline is set by the previous budget. However, zero-based budgeting takes a different approach, starting from scratch at zero and building a new budget without relying on past figures.
The objective is to allocate every dollar of income so that the balance, when income minus expenditures is calculated, equals zero by the end of the budget period. For instance, if your monthly income is $5,000, you would assign every dollar to specific budget categories. These categories can remain consistent month to month or be adjusted as needed.
