A budget keeps track of money coming in and money going out. Most often than not, people pay utility bills and buy luxurious items before they a realization that there is no room to save money for other necessary expenses anymore. Zero based budgeting helps in the prevention of this problem. Zero based budgeting is a method of budgeting in which all expenses must be justified in each new period, as opposed to only explaining the amounts requested in excess of the previous period's funding. There really is no need for you to invest in a fancy budgeting tool in order to do a budget, but a good one will make the job easier. Many banks are now offering free PC banking and free personal finance software. You simply dial into the bank's computer or use web-based banking services, and download the checks that have cleared your account, directly into your personal finance software. 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. We all want to spend our retirement traveling around the world, relaxing on a cruise, or simply go fishing on a lake which is just a few meters away from our own comfy cottage. We all have a dream retirement in our heads. Whatever that is, we can achieve this through budgeting and planning. What to budget on and to plan on: 1. This is so because you learn to accessorize to look great and not have to spend a lot on it. The money allotted for electricity, water and tax should not be disturbed anymore. Tampering with the money allotted for electricity could give you a momentary joy or satisfaction on having purchased something else. Home payments and maintenance, utilities, auto maintenance and payments, insurance payments, child care and alimony, education, food, clothing, entertainment and travel are just few of the many things you spend your money on regularly. In today's expensive living, budgeting should be practiced to give you power to rapidly gain control over your complicated spending.