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Zero-Based Budgeting
Every budget line starts at zero — must justify itself, not inherit from last year.
Goal
End "this is our budget for 5 years" — every dollar justifies itself.
Steps
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1
Start with blank page — no last-year numbers.
Expected Outcome
Immediate
You find 15-25% of spend unjustified.
Evidence base
School: Zero-Based Budgeting
Founders: Peter Pyhrr (1970)
Pyhrr (Texas Instruments) — HBR 1970 "Zero-Base Budgeting"; adopted by Gov. Jimmy Carter and went federal.
Keywords
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Frequently asked questions
How long does "Zero-Based Budgeting" take?
This exercise takes about 90 minutes, practiced in a group in a Action format.
When will I notice the effect of "Zero-Based Budgeting"?
You find 15-25% of spend unjustified. In the short term: In a quarter, savings redirect to real priorities.
Is "Zero-Based Budgeting" evidence-based?
Yes — it draws on Zero-Based Budgeting (Peter Pyhrr (1970)). Pyhrr (Texas Instruments) — HBR 1970 "Zero-Base Budgeting"; adopted by Gov. Jimmy Carter and went federal.
Is "Zero-Based Budgeting" suitable for beginners?
Its difficulty level is: Advanced. No external tools required — it can be practiced directly inside the app.
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