Types of Budgets
Understanding the Different Types of Budgets: A Comprehensive Guide Budgeting is essential for individuals, businesses, and organizations to manage their finances efficiently. In this guide, we will explore the different types of budgets commonly used across various sectors. Whether you’re planning your personal finances, managing a business, or running a government organization, understanding these budget types can help you achieve better financial control and decision-making. 1. Zero-Based Budget: A Fresh Start Every Time What Is a Zero-Based Budget? A zero-based budget (ZBB) starts from zero, meaning every expense needs to be justified and approved for each new budget period. Unlike traditional budgets, which rely on the previous year’s figures, a zero-based budget considers all expenses from scratch. Why Use a Zero-Based Budget? Cost optimization: By reevaluating every expense, unnecessary spending can be identified and eliminated. Efficient resource allocation: R...