How to Manage a Budget

Video Transcript

"Hi, this is Doug Benson on behalf of Expert Village. I'm going to show you how to balance your checkbook and as a result become a better manager of household finances. Now that we are getting a budget set up on paper we are on our way putting the budget in into practice isn't quite as easy. One tool that people use to help manage a budget is called the envelope system. The envelope system works very well for items that you can pay cash for; this isn't really a new idea and has been around for quite a few years. But it's been recently started to gain unpopularity again it's simple to setup and very easy to use. The system is based around a few envelopes that you designated for budget items and they have a specific amount of cash in them. Popular use for envelopes are things like groceries, eating out, gasoline for your car, entertainment and pocket money. Take the amount of money that you have available for groceries, is an example for the month and put it into the envelope. When you buy groceries the money only comes from the grocery envelope the same will hold through the other envelopes that you designated. When the cash is gone you need to wait until the next paycheck to put more money into the envelop. The envelope system is a great way to get a budget started and for you to quickly see what is left in each envelope before you go out shopping. Watch my next segment as we continue to learn more about balancing your checkbook and becoming a better manager of household finances."