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Zero-Based Budgeting

Every budget line starts at zero — must justify itself, not inherit from last year.

90 min Advanced

Goal

End "this is our budget for 5 years" — every dollar justifies itself.

Steps

  1. 1
    Start with blank page — no last-year numbers.
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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

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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