Identify the steps necessary to create a personal budget Directions

  • Identify the steps necessary to create a personal budget

Directions

  1. Review the How to Budget Using the Envelope Method below, or find another “how to budget” video of your choosing.
  2. Select one type of budgets suggested in the text or in the video.  Write down each step for the type of budget you selected.
  3. Complete each step using your own financial information.
  4. Please share what video or method you learned about? Do you think this process for creating a personal budget was helpful? Is there anything you’d change?

Cash Budgeting Using the Envelope System | CASH ENVELOPES | Young Finances

LATISHA: Hi it’s LaTisha from YoungFinances.com. And today we’re going to talk about how to budget but specifically how to budget using the envelope method. So I’ve had a couple people ask me how can I budget using the envelope method? The envelope method is so easy is a great method if you are having a hard time figuring out how to budget. It’s kind of like a baby budget starter method and it’s perfect for beginners and it’s easy to do, it’s easy to budget with this method. So let’s check out how to budget with the envelope method.

You’re going to need envelopes. Obviously you can tell these are the store brand because I don’t spend money on the name brand. Hehe. All envelopes work the same. You’re going to need a marker and you’re also going to need your cash, your money. I’ll try not to throw this up. You probably receive your paycheck either by direct deposit or even if you get it on a paper check you still have to go to the bank and deposit it. So once you’ve deposited
your check figure out what automated transactions you have coming out. So any automated bill pay and you leave that cash in your bank account. So if you have $50 you that you know is going to automatically come out for your cell phone bill then you leave that cash in your account. Everything else you pull out.

Let’s say that you get paid $100 and you have $50 worth of automatic bill pay. I would recommend leaving in and $50 plus about 10%. So leave in $55 in your account. I always suggest having a little bit of a buffer in your checking account. People say don’t have a buffer because you should know what’s coming out but believe me I’ve had plenty of unexpected expenses, errors where someone has charged twice and the amount of your checking account and other things bounce so just have a little bit of a buffer in there, it’s going to help you out.

So then you’re pull out the remainder so $100 minus $55 is going to give you $45 correct. So you have $45 left, so you’re going to take that so now you’re got your $45 cash – let’s assume this is $45 dollars cash. It’s actually $16 because that’s all I had in my wallet at the moment.

So now that you have decided that you’re going to do the envelope method. You want to think of your envelope categories. You’re going to take your first envelope and you need enough envelopes for how ever many budget categories you have so I’ve got all of my necessary bills taken out so I have one envelope for eating out I’ll do another envelope for shopping and I’ll do another envelope for goal savings. So I have a mini goal of something that I’d like to do, so I’m going to use that envelope for that. Ok.

You’re done with the envelopes and you take your marker and you write on the first envelope what did I say? Eating out? Entertainment? Eating out. Then you take your next one for shopping and then your last one was some goal savings. So my goal of saving was always travel that’s my fun. Ok. so now it’s done you wrote your.. all of your items and you’ve got your envelopes.

You’re going to take the amount that you like to put in each envelope and you just stuff it in there. I’m going to put some of this money in my goal saving envelope. In shopping envelope and the rest of it in my eating out account envelope. There you go.

That’s the envelope method it’s the simplest way the budget so now you got your envelopes anytime you want to go shopping you just peek in this envelope, if there’s something in there you can spend it. You grab a couple of envelopes and you stuff the cash in there Pretty easy huh? I think so!

If you liked this video please be sure to give it a thumbs up and make sure to subscribe as well because I’ve got videos coming every single week just for you if you’d like more information on budgeting and simple ways to manage your money head over to YoungFinances.com I’ll see you guys next time. K bye. Envelope? Is it envelope or ahhn-velope?