ZBB vs. Traditional Budgeting
With traditional budgeting, you only analyze your new expenditures and use your previous budget as the standard for your next budgeting period. For example, if your family spends ₱5,000 on monthly groceries, you use that number as a base for the next month’s grocery budget. If there’s a case of inflation, you allocate more money into your grocery budget on top of the ₱5,000 base budget.
On the other hand, with ZBB, you work on your budget in more detail and with proper scrutiny. Firstly, you start fresh with a “zero-base.” You list down every item or service you plan on buying and make sure it fits within your set budget. With this method, you get to justify each purchase and scrutinize where your money is going. If you’re on a limited budget, this strategy can help cut unnecessary expenses.