How to use envelopes to budget your money [video]
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Got a problem making ends meet each month?
There’s an easy and cheap way to stick to a budget using envelopes. David Colker, an editor in the Business section at the Los Angeles Times, shows how to do it.
This method of budgeting was popular in the Great Depression, and it is coming into vogue again in this tough economy.
All you do is take an envelope for each category -- say, one for gas, one for food, one for entertainment, one for rent -- and put your budgeted amount of cash in it for the month.
When you’ve spent the last dollar in an envelope, that’s it, you’re done spending in that category, unless you take some money out of another envelope. You might have to give up some of your entertainment dollars to pay for gas if the gas envelope empties too quickly.
This method of budgeting worked for some of the couples profiled in The Times’ recent article on getting out of debt. You can read it by clicking here.
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