Zero-based budgeting is a method of budgeting in which all expenses must be justified and approved for each new period.

What is zero based budgeting?

Zero-based budgeting (ZBB) is a method of budgeting in which all expenses must be justified for each new period. ... The budgets are then built around what is needed for the upcoming period, regardless of whether each budget is higher or lower than the previous one.

What is zero based budgeting example?

A zero-based budget is where you assign all of your income to specific budgeting categories until there's no money left over. For instance, if your paycheck is $3,000 a month, you divvy all $3,000 up among your expenses, debt payments, and savings goals until you're left with $0.