Zero-Based Budgeting

In Essentialism, zero-based budgeting is offered as a concrete tool for the book’s central discipline: forcing every use of time and resources to justify itself anew from zero. Greg McKeown contrasts it with the default accountant’s habit of using last year’s budget as the baseline for next year’s projection; with zero-based budgeting, “they use zero as the baseline. In other words, every item in the proposed budget must be justified from scratch.” The book lists its advantages — it allocates resources by need rather than history, detects exaggerated requests, surfaces obsolete operations, and pushes people to be clearer about their purpose. Kyle’s note on the passage flags it plainly: “Tool: zero based budgeting.” It sits alongside the Reverse Pilot and “extreme criteria for filtering options” as McKeown’s tactics for the disciplined pursuit of less.

Context: Zero-based budgeting (ZBB) is a financial management method developed in the late 1960s–1970s in which every expense must be justified for each new period starting from a “zero base,” rather than incrementally adjusting the prior budget. It is used in corporate finance and government to root out legacy spending.

Where this appears

• Essentialism — zero-based budgeting as a tool for making every use of time and resources justify itself from scratch, rather than inheriting last year’s baseline.