Zero-based budgeting means every dollar of income gets assigned a specific job, bills, savings, spending categories, before the month starts, until income minus allocations equals exactly zero. Nothing is left unassigned. It gives more control than percentage-based methods but takes more upkeep, since it has to be rebuilt or adjusted each time income or expenses shift.
Want the full method? See how to build a zero-based budget to maximize cash flow for the step-by-step setup.