Surely, budgeting and forecasting enable a company to monitor progress towards goals, control spending, and predict cash flow and profit, as well as improving its ability to respond quickly to competition. Keep in mind that budgeting is not an exercise in frugality. It is about planning ahead and keeping a good balance in finances. Getting Serious with Personal Finance Budgeting Have you ever noticed that no matter how much money you make in a month, there is never enough? You most likely know how much you earned last month, but do you know how much you spent? If you dont, you are not the only one who doesn't. According to survey, most people spend 10% more than they make! In this final aspect of controlling, differences from budget are noted, evaluated and explained because this helps the household or organization's ability to begin preventive or corrective actions. Managers of any home or organization are responsible for ensuring that the costs outlined in the budget are accurate. If you live alone, then good for you because the only dillemma you have is budgeting for your personal needs. This is where personal budgeting kicks in. Personal budgeting is when you allot certain amounts for your personal needs. It is not as difficult as simply budgeting because you don t have to worry about whether other people would find your way of living livable or not. The Australian National Audit Office has identified the advantages of activity based budgeting: The Advantages - Output costs are supported by a schedule of costed activities - Opportunities to examine work processes - Identifies non value-adding activities that can be eliminated - Basis of a performance measurement system and direct link between strategic goals and operational realities - Enables cost profiles to be managed - Accurate costing data for operational management - Costs are transparent, understandable and actionable Disadvantages - Activity definition may become too detailed and the model may become too complex and difficult to maintain - Underestimation of the task of collecting activity driver data - Implementation may be considered a financial management fad and there is insufficient commitment from operational managers Activity Based Budgeting Disadvantages - Usually requires buying Activity Based Budgeting software - Requires training of all managers including budgeting department - Requires people to really understand what drives their budget - Eliminates excuse that activity volume changed because it makes visible volume changes - Requires everyone to collect or estimate activity volume By understanding how resources are transformed into products or services, and byfocusing on the cost of activities, activity based budgeting helps an organisation to obtain a greaterunderstanding of how costs behave in their organization and which activities create significant amounts of cost. You can make use of a pie chart to keep your budgeting handy. In your chart, the most important necessity, which is food, should occupy the biggest slice of pie. The money allotted for it should only be enough to buy a cheap but nutritious and delicious meal. Here are further budgeting tips that can prevent you from acting like you haven t eaten for decades, and grab almost everything you find edible from the grocery racks.