Zero-Based Budget
Planning & BudgetingA budgeting method where every dollar of income is assigned a specific purpose, with income minus expenses equaling zero.
Example
Example: You earn $4,500/month after tax. In a zero-based budget, every dollar gets assigned: rent $1,350 + groceries $400 + utilities $200 + car $300 + insurance $150 + dining $200 + entertainment $150 + savings $500 + retirement $400 + subscriptions $100 + personal $150 + sinking fund $100 + buffer $100 = $4,100. The remaining $400 gets assigned to debt payoff. Zero dollars unaccounted for.