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Business
Zero-Based Budgeting
A budgeting method where every expense must be justified from scratch for each new period instead of just increasing last year's budget.
Zero-based budgeting forces efficiency and can cut waste, but it is time-consuming. It is popular during cost-cutting periods or when a company wants to re-examine all spending. Many governments and large corporations have used it successfully.
It's starting with a completely empty spreadsheet every year and asking 'do we really need this?' for every single cost.
Real world: A company using zero-based budgeting makes every department prove why it needs its marketing, travel, or office supply budget instead of automatically getting 5% more than last year.
💡 Zero-based budgeting stops lazy spending by making every pound justify itself.