" Activity based budgeting is a method of budgeting in which activities that incur costs in each function of an organization are established and relationships are defined between activities. This information is then used to decide how much resource should be allocated to each activity. In other words, activity based budgeting is budgeting, planning and controlling by activities rather than cost elements of an organization. Here is a simple spending system that can greatly help your personal finance budgeting: - Create a personal finance budget that you can use - Save 10% of your income - Always know exactly how much you have left to spend - Instantly know the impact of every spending decision - Track all your purchases - Pay your bills on time - Effectively manage credit card spending Many people create a financial budget based on other people financial worksheets. A small notebook is not large enough to be uncomfortable bringing around in your bag everyday. This notebook can even be carried in your wallet or purse. Start writing down every little detail of expenditure on a daily basis. Do not forget to include the coffee you stop for every morning before getting to work, or that soda you have in the afternoon after getting off from the office. Below are five simple keys to financial control: 1. CUT THE CREDIT CARDS It is best if you don't use credit cards, or even own one. If you think you're responsible enough to use it in emergency situation, then leave one for those times. Buying a Gucci dress for a hot date isn't an emergency situation. Debt problems are another obstacle that blocks your financial freedom. Getting out of it is not impossible. As soon as you record in details your financial situation, the software will guide your way out of the debt trap you are trying to get away from. Budgeting software companies offer technical support and promises that mathematical problems about budgeting are a thing of the past. The advantages of zero base budgeting - efficient allocation of resources as it is based on needs and benefits - managers find out cost effective ways to improve operations - detects inflated budgets - useful for service of department where the output is difficult to identify - increases communication and coordination within the company With zero based budgeting, every department function is reviewed thoroughly.