Can anyone tell me a simple way of making mud?

Oil paint mixed with filler works for me.If you want wet mud just gloss coat it after it dries.

dirt, white glue and water worked for me
I've tried baking soda w/ paint, but it didnt take too well.

Joe -

I've been using white glue, acrylic paint (color to suit area), and "flocking" (grass, earth, etc.) thinned with water to get desired consistency then paint on with old brush.

Blade48mrd

I use a combination of Plaster of paris, play sand, PVA glue, burnt umber acrylicpaint, acrylic gloss media and water.

I'm old and lazy, I buy a tube of Elmer's wood filler, already a nice mud color, and all mixed up. If I want it darker, I tint with some ink, the ink also thins it a little. A little static grass, sand, what ever to change the texture.
Comes in several wood (earth tone colors also)
Thins with water, dries fairly quick, and is cheap and easy to use.

Coffee, mixed with PVA and water.

Thanks for all the comments, I will show the results soon in a diorama.