Activity Based Budgeting in Organizations Activity based budgeting is not new. As early as 1990, some organizations in countries like the USA and Australia implemented this new budgeting program to replace the old and known method of budgeting, the "line item budgeting." 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. In your home budgeting, include your income as well. Income means the regular pay you receive from the office plus the side work you do that gets you paid as well. Anything that brings money into your doorstep on a somewhat regular basis. Now you may begin comparing the income and the expenses. If the expenditures you make are larger than your income, you are going to have a look at cutting back on your spending. Without it you muddle through, unable to stay on course because you have no course charted and you have no equipment for steering through the currents that constantly swirl around you. Traditionally, many people managed their money by dividing their cash into several paper envelopes. These envelopes are for food, entertainment, utilities, insurance, vacation, etc. Since the lifeblood of any business is its ability to collect cash and pay bills including the pay checks of its employees, it is important to prepare a forecast of its cash requirements whether for a new or ongoing business. All businesses need to have an idea of future income and costs. This is best tackled by preparing some form of a budget as well as a forecast. A business budget allows you to perceive problems before they occur and alter your plans to prevent those problems. In business, budgets help you determine how much money you have at present and how you will use it, and help you decide whether you have enough savings to reach your financial objectives. The first one is easy. All you have to do is scout, scout, scout: in the internet, thrift shops and local markets. The challenge lies on the second. Wedding budgeting is tricky. Wedding budgeting is not all about finding the cheapest supplies. It starts with dividing your money in percentages and putting them in their right places.