What is the goal of a zero-based budget?

The goal of a zero-based budget is to allocate all your income to specific expenses, including savings and investments, such that you effectively account for every dollar that comes in, leaving you with a balance of zero at the end of the budgeting period. This approach helps ensure that funds are intentionally directed toward various categories, including essential expenses, discretionary spending, savings for emergencies, and investment contributions.

By using a zero-based budget, individuals can prioritize their financial goals and ensure that they are not overspending or allowing money to go unaccounted for. This method promotes mindful spending and ultimately contributes to a healthier financial situation. Therefore, the goal is not to have extra money left over, but rather to use every dollar purposefully to achieve your financial objectives.