Zero Based Budgeting (ZBB) is a financial budgeting method in which all expenses must be justified for each new period. The ZBB process starts from "base zero", and each function in the organization is analyzed for its needs and costs. The budget is then built on what is needed for the coming period, regardless of whether each budget is higher or lower than the previous one. Here are some things you need to know about Zero Based Budgeting.

ZBB is a technique used by companies, but this type of budgeting can be used by individuals and families. ZBB is a method used to track expenses. This method can help for lower cost budgeting.

How to make Zero Based Budgeting:

1. Decide on a budget timeline

First, decide when you want to start and end this budgeting method.

2. Calculate and write down the source of income

At the planning stage, calculate and write down the sources of income you have.

3. Record expenses

Then, note down the costs you usually spend.

Source: Investopedia