With the gas envelope: take the money to your common gas station and get a reload-able gift card. I usually budget for fuel/gas and load it on to a gas card. Just like he mentions, I load it no matter what so I have overage for want I am in between paydays and it just sits so I will have wiggle room to pay down debt one month because I am good on gas. Just a suggestion.
Most gas stations have lower gas prices if you use their gift card because they don't have to pay for credit/debit card processing fee and they don;t have to deal with cash deposits.
PrimeExcellence If I can offer a tip? I usually see how long I between fill ups and how Mich is needed to fill me up when really close to empty. From there I multiply by how many times I need to fill in a week. Now that I am in a small car rather than a large SUV $25/week is a great place to start. I further buffer myself by going $50/pay on a card. If I use it up before my next pay I have a gauge for my budget and I up the amount. If I have a particularly good budget week o will put $100 on it and that gives me a nice buffer before I have to reload card. :-) hope that helps!
I am so inspired! I just graduated from college with a considerable amount of debt. I am praying to God that I can overcome this challenge. I don't know you or your husband but it gave me comfort to know that you both paid off $61k! What an achievement :)
Thanks for making this video! I came across your video when I first learned of the zero based budget and i like how it was laid out plain and simple and written out since I'm a visual learner! After I shared your vid. with my husband, he understood what I had been trying to tell him and agreed to put this to the test! We are now 5 months (10 pay checks) in, and we have gotten from $13,000 debt to $3,000 debt! Never in our entire 6 years of marriage we have seen eye to eye on finances until now. I love how we are both on the same page and we both know where we stand. It has taken ALOT of work, sacrifice, patience, and math to get this far... But I can finally say, we are successfully moving forward! It's wonderful! So thank you for helping our marriage, our finances and steering us on the right track :) you rock!
The whole basis for this kind of approach to budgeting is prioritizing debt reduction. The real benefit (and found money) is when you can begin to engage in debt avoidance. No car loans, no mortgage, no credit cards. Discipline is the key and I never used an envelope system. I always use a debit card to keep the "extra" money out of my minds eye. I don't even carry cash in my wallet.
It is funny how cash is the item I burn through. When it is on a card, I almost get whiny about having to find it, take it out, swipe, read a screen and type something... omg, I hate it.
My wife and I recently started following Dave Ramsey and learning how to really deal with our money. We have been really hyped up about it, but having a hard time really understanding how to apply it. This video really helped. Thank you so much. *subscribe*
This is something kids should be taught at school so they can manage their money later on + teach their parents that might struggle with financial planning. Simple video, explaining simple concept, but for some reason it seems it is so hard for way to many people around. Thanks for the video. Good job!
Zero-based budgeting can be described as "starting from scratch" or a "bottoms up approach." Instead of beginning with a set of presuppositions, you simply begin with the question: What is my mission, and what are the critical resources and activities needed to fulfill it? By answering that question, you isolate the things on which you should be primarily focused. ZBB is advantageous because it illustrates the importance of certain resources. Likewise, it's the best way to ascertain the tasks that must be completed. In other words, it reveals the critical activities, and therefore the critical path, of a specific project. Such knowledge is integral to fulfilling one's goals more expediently and efficiently, for by identifying the critical activities--and by extension, the critical resources--you can avoid overspending in areas where it may seem prima facie necessary but is actually unnecessary. ZBB often supplants incremental budgeting, in which you add to the budget from the previous fiscal year. The latter kind of budgeting can be problematic in that it often causes one to hold onto activities or resources that are obsoleted by the present economic climate. It also supplants open ended budgeting, in which one proceeds from the assumed premise that allocations can be granted without limitation. In contrast, ZBB begins with a scenario in which a program doesn't exist, and proceeds by determining the essential components for bringing it into existence. To a certain extent, it also proceeds from the question of what would happen if such-and-such a program didn't exist, whereas all other budgeting techniques assume the program's existence. Unfortunately, ZBB never gained much traction in government because the assumed premise on which it's based--the nonexistence of an entire program--is often politically unfeasible.
Thanks so much for this video! I have watched countless budgeting videos that gave me the round about way to use this system and you were very clear cut and a light bulb went off in my head 😊 and it all made sense, you have helped a me a great deal and lifted alot of stress from my shoulders .. this is why I love RUclips and why I THANK YOU and your wife for sharing your best practices !!!
PAY YOURSELF FIRST. Even if it's just $10, save it for your retirement nest egg. Then save up an emergency fund. Being in debt only matters to people that have something to repossess or seize. FICO is mainly for getting credit, which you should be trying to get away from.... Cut the expenses that you already have. You don't need weekly manicures, car washes, restaurant dining, cable (yeah I said it lol), drycleaning, name brand food stuffs lmao, don't drive everywhere, these kinds of changes will help you SAVE money. This video teaches how to MANAGE money. Why not buy the house first, put an rv in the yard, rent the house, live in the rv free, and then payoff your debt with the rent income and your paycheck excess?
How about no. Money is actually simpler than that. You don't need to buy an RV and live in it for years in order to win with money. Also, emergency fund comes BEFORE saving for retirement. An emergency is just that, and you will go into debt without one
@@hershekissed Gains from the ups and downs of the stock market will mean nothing when people are paying interest to banks for their massive credit card debt because every time an expense pops up, they'll just put it on the card.
Thank you for the video! Very in depth about the envelope system and answered a lot of ?s I had about it. My wife and I (both 23) with an 11 month old baby are working on paying off our debt. Our snowball started at about 300 a month and is up to 800! I really think it will be a lot bigger now that we will be implementing this system, once we work out the kinks and numbers. Thanks again and Congratulations on the debt payoff!
We just wanted to thank you so much for this video. We've used this system for about 3 years now and are now out of credit card debt and have just closed on our first home! Admittedly our incomes increased while this happened, but it helped us keep our spending managed so we could resolve all of our debt. Thank you again for sharing!
My wife and I are starting this. We have been trying for about a month now and it's hard to figure the allocating out. This video showed us our many mistakes. Thanks for the help, now I think we will get it right. haha.
I started my plan to get debt free on July 16th. I'm a single mom of one. I am 25,000 in debt. Almost 9k from the custody battle and 16 from student loans for a degree I never finished. I plan to be debt free in 2 to 3 years. Thanks for the step by step help.
wbhomesteader I started a blog called Live Like Brittney to help me stay accountable to my goal. My second post will be about how everything that is broken just needs the right tool and the right tool for me is the zero based budget. I'll be linking to your video. It was the perfect step by step for me and I really want to share all of the knowledge I've gathered with my readers. It would be awsome if you guysed would follow me on twitter/facbook and on livelikebrittney.blogspot.com/
This system really makes sense to my brain. The way you've written it out makes it really easy to understand. I've been unable to successfully keep a budget or workout and envelope system before this and was totally discouraged. I think if I watch your video a couple more times I'll have it under control.
Quicken,mint,budget for dummies,dave ramsey etc.. the way you put is alot better than any other. I literally jumped out of bed and grabbed a pencil and paper and started noting things down. Thank you very much!!!!!!!!!
steve b If you see the time when I posted it was late at night. Yay, you corrected me missing one letter. I knew that and everyone else knows what I'm talking about. Enjoy the block hater.
This is by far the best video on how to budget I've seen thus far. No hidden agenda to sell anything. I just started this up last paycheck and should start seeing a brighter light towards late August to where I can start the debtfree snowball effect.
What are house prices like in your area? Here in Dublin, Ireland we could NEVER save enough to buy property with cash. It's €200,000 for a tiny two bedroom home here. Congratulations on being debt free. We're extremely lucky to have no debt. College fees are state paid and credit cards are extremely hard to get nowadays.
Rebecca Sankey Thank you...:-) Home prices are still depressed since the housing crash in 08/09...a tiny 2 bedroom would be probably €60,000. Also Dubin I assume is a larger city? Prices in large condensed cities here are probably the same price. We live in a rural area and paid very little for our first debt free place. Our $14k (Paid For) Suburban Homestead Property
Wowzers!! We're currently bidding on a house about an hour outside dublin and asking price is 150k!! It's a 1400sq metre 4bed house so a lot bigger than city houses but my partner works in the suburbs. He'll have an hour commute. Poor man :( congrats on your home!!!
Just wanted to stop by and say thank you for explaining this in lay-mans terms. We have started to tackle our debt, and we feel very confident your system will help us achieve just that. We are only in the beginning stages, but surfing through and watching hours of countless videos on failed systems, we feel very confident after we watched your video. Thank you!
Wow! I started doing this in February 2017 and I tell you it changed my life. I was using one excuse after another but that was just in my head. I have found about £350 in my budget that was unnecessary expenses. Sold one car and a lot of crap. Paid back around £7000 debt in 8 months and still paying minimum on every debt. You guys are right but it might take time for some people to understand. Thank you.
Okay so did I pick it up right? You are saying to work on the lowest balance credit and GET THAT ALL PAID OFF FIRST and then work my way up to get the rest paid off? But then again you have your monthly payments?!
You can do lowest balance first if you need that morale boost. He said not to focus on interest rate if you're paying off that much a month which is true. The savings are minimal if you're paying off huge chunks, assuming you Donna have big differences in interest between cards/loans. If we're really honest here, focusing on debt going to 0 is not a good idea if it's going to take you more than a year or two. I would invest that money you'd be spending on paying down debt. It all depends on you and your situation though.
$1600 - $840 = $760 not $750 😎 The basic concept of your budget is Use any surplus money to pay off your lowest total debt first. I don't agree with this. Interest rates do matter, especially on credit cards. Why blitz a credit card with extra payments when it could be $3000 debt sitting at 0% when you have another card with $4000 debt sitting on 27.5%? Makes no sense other than you will feel better having wiped another card off your creditor list. But this will cost you more money and take longer to clear all your debts over all. My tip would be anywhere you see the word credit replace it with the word debt. it makes it ugly and not so tempting anymore! Credit card=DEBT card 6months 0% credit-6 months 0% DEBT Interest free credit-interest free DEBT
this is good because it helps you get momentum and see DEBT disappearing. It's a matter of seeing your efforts pay dividends and encourages you to tackle the next smallest debt. Hence why it's termed the DEBT SNOWBALL
Owolabby Azeez The debts won't disappear if you ignore the high interest rate debts. If anything this is the worst thing to do and you risk bankruptcy as the high interest debt can spiral and you no longer can afford your monthly payment cause you've spent your extra cash paying off a 0% interest debt when it could have sat there happily for a year.
It's not about the math part of it. Its about momentum. More people will get out of debt completely by paying off the smallest first. They get a rewarding feeling and are more likely to stick with the program. Yes, paying off the highest IR first is the better math thing to do, but if they are going off of math, they wouldn't be in this spot in the first place.
Going though Financial Peace University now- I needed this video to clarify how this works. Trying the budget tonight for the first time- and giving myself a 3 month grace period to get the hang of it. Thank you!
dude i actually found this extremely helpful specially since ill be graduating high school and parents need me to man up and tackle the world on my own, thank you very much i feel this will get me to break the cycle of my family being not so great with money!!!!
good luck, sincerely, Matthew. Life is harder than it seems and thanks to the federal reserve devaluing my, your, and everyone's dollar at least yearly since christmas eve 1913 thanks to woodrow wilson's ignorant help, you'll need to stay ontop of your budget and check book-game every month adn every year if you don't want to be a slave to debt. I speak from lesson-learned -the-hard-way experience. It is NOT a life you want to get stuck in. Have you ever tried to climb a pole after getting automobile oil all over your hands, feet, and legs without any gear near by or way to wash away the oil? It's pretty much impossible and beyond frustrating. That's the way the longer you life in debt feels like year after year. If you family and possibly yourself is like myself a year back, and my family, start your savings-change of mentallity- small. Perhaps instead of 10% of what you make, start with only 5 or 3%. That way the amount you put in savings envelope is so small you won't even miss it. AFter a month or two, it will become like breathing and walking that it is so easy to do and thoughtless. NOW pump it up to 10% for another two months if possible. Look at what your expenses are. If you are lucky enough to have none except for putting gas in your car, then start saving at least half of what you make each pay check. By the time you're mature enough, (**no offense when I say that because in all sincerity I personally didn't grow up COMPLETELY until around the age of really 28 so I know how it is to be an old teenager 18 to 21 years old and life is your playground**), and old enough to think about buying a house, you'll be able to EASILY smack down a 15% or better down payment and pay that sucker off with a FIXED 15 year mortgage in that time or maybe even less because you'll already be mentally trained and ready for that tougher scenario when you REALLY have real bills. No one truly knows how hard life is until he or she moves out of mom and dad's house and he or she must pay his or her ALL expenses. Soon you'll start questioning to yourself what is priority and ditching the things that aren't needed. That's part of growing up. It sucks, BUT if you keep yourself disciplined with managing your money, you won't have to do with many or any of your favorite expensive hobbies. Cheers * toasts a 7 year paid off 2005 civic si your way *
Really good information here. I get paid once a month and I set up an account I call the buffer in addition to a regular budget spreadsheet. Any overages I have such as utilities costing less than allotted...the extra goes to the buffer account. The buffer also gets paid a set amount for birthdays, holidays, garbage bill, the second half of the month...and anything that comes around at odd frequencies (as in not monthly). I totaled all these things up for the year and Pay On them each month. We never have feast or famine months, I never worry about vet bills or surprise graduation invitations because the buffer has a category for that. At the end of the year I calculate the actual amount spent in each category and raise or lower the amounts of each based on real costs. I've done this for years and it was the key to my early retirement.
We started on 12/24. We didnt low ball our envelopes, started with amounts we will likely lower in 3 months. Just by setting up a no option to fail plan (no option to over swipe or spend ) we've already got $500 towards our $1000 goal!
thank you! I've been watching a lot of budget videos but this one just put the budgeting and envelope system into where it made more sense for me. I've been working hard to pay off my debt but with out the envelope system Im still swiping my debit card for food. I'm always blowing my food budget. I've only been really tacking my debt since Nov of last year and I've only been trying to get the zero dollar budget system down for a few months now do it was good to know that it takes a few months to perfect the system.
This video has changed my life. I wish I knew about this earlier in my life. The way you explained things just made sense. Greatful to have stumbled on this video. Thanks again for sharing this video. God bless
This works fine when inflation is very low. You know for sure how much you'll spend on each item. In places where inflation is above 5%, the prices go up faster than you can get a salary hike. In that situation, this is what I'd suggest: 1. Repay the debt that charges maximum interest %. Bring that debt down completely. When inflation is high, the rates are higher. 2. If the inflation is 'x', plan to keep 2x as your monthly buffer. Don't budget it out. That envelope should only be used when prices have increased beyond budgeted limits. Make a note of how much was borrows from this envelope and the category that borrowed it. Use that info for your next month's budget. 3. Anything that remains from the inflation buffer envelope should go one part into debt clearing and another part into a deposit as savings. 4. Use a bicycle whenever possible. 5. Cook food at home instead of buying processed food. When you buy processed food, you are paying for the entire supply chain that brought that food into your hands. Processed foods are a greater good for the economy but cut down on them if you are burdened by debt.
great video,you made it easy to understand what we need to do. we just signed up for the Dave Ramsey classes. thanks for the head start. we have about 10k in debt. we have set a 12 month goal to be debt free.
Awesome explanation of this, i never could understand it until you just went through it all in this video, Dave Ramsey is great as well.... love listening to his program whenever i can.
Hi mate thanks for the video. Everytime I feel a bit out of track I come back and watch this video. very informational. Hope you are enjoying the debt free life!
Learning about this snow ball debt as teenagers neither me or my husband have ventured into debt. This system is not for us but hearing about it and how hard it is to get out from under it made a big impact teach teens how to start right. Emergency savings before your first bill.
im going to +1 this simply because you follow Dave Ramsey like I do :) it's an amazing feeling when I can pay what little bills I have and STILL have money left over to fund my retirement.
Im so glad you shared this! Actually bought the Dave Ramsey Kit and an envelope system filer from Etsy! Im am so excited of paying my debt off and be debt free. Just want to mention that you stated a good point in not borrowing money again! I was actually planning to buy my first house soon!! And we definitely rethink and buy it cash! Because you are so correct in saying that credit card and loan company want you to pay it off later rather than sooner so the interest rate racks up. We end up paying so much more. So happy I watch this! Im definitely going to share this with my husband. Would love for us to do this together.
I am a frugal mommy blogger and I love this video I'm going to try this for a few months. I have a really big move across country so I hope this works.
This is going to help us! I can't wait! My question is what about automatic drafts that we have no say about when they are paid? Do you ever encounter that and does it throw you off?
Thank you, I finally understand how to do this. I appreciate that you did this video. I'm a visual person and you made it simple for me. Good job paying off your debt. I'm just starting.
This was very imformative, thank you for taking the time to inform those who are striving to become debt free. Ive done financial peace but i like the way you've put it.
I would suggest doing the zero based budget in a program like Quicken or equivalent. You will just have to spend a little more time keep track to make sure you go over budget since you will be using debit card instead of cash. But if your just starting out with this system, I would suggest doing the envelopes so you get used to budgeting. I will be making a video of this soon because I know a lot of people have a hard time committing to using cash only.
I get asked about this quite often, so I was going to make a quick tutorial myself. I'm glad I searched first though because you saved me the hassle of setting up the camera, pen, and paper myself. Thank you for making this. I'll be adding this to my favorites to share with anyone who asks. p.s. Love me some DR!
Leila, we use envelope budgeting software instead of paper envelopes at home. Money is put into 'virtual' envelopes. When you spend money using a card, you enter that transaction into the software and it takes the balance from that envelope. We use YNAB budgeting software, based on envelopes and is zero based. Android and Apple apps are available so you can enter your spending live with the transactions synced back to your MAC/PC. We have paid off over £70,000 in three years!
I actually did something similar a few years ago, which worked for me. I get paid twice a month, with the first paycheck I paid all my bills except for rent, and then with the other paycheck I would pay the rent. after those payments I would end up with about the same amount in each paycheck. I would then divide left overs and allocate 1/2 to debt and 1/2 to savings. It really works. When you analyze how you spend your money, you begin to get better at knowing how much money you will have left, instead of just swiping the card left and right without keeping track of expenses. I started with the lowest debt and then as I paid them off moved on to the next lowest debt. I also noticed that interest didn't really matter because i was paying so much more than minimum that it didn't make a difference. Also, I would always round up the bills to pay a little more on the cc.
With the gas envelope: take the money to your common gas station and get a reload-able gift card. I usually budget for fuel/gas and load it on to a gas card. Just like he mentions, I load it no matter what so I have overage for want I am in between paydays and it just sits so I will have wiggle room to pay down debt one month because I am good on gas. Just a suggestion.
that's a great idea
Good idea..thank you
Most gas stations have lower gas prices if you use their gift card because they don't have to pay for credit/debit card processing fee and they don;t have to deal with cash deposits.
Wendy Easler that’s a smart idea
PrimeExcellence If I can offer a tip? I usually see how long I between fill ups and how Mich is needed to fill me up when really close to empty. From there I multiply by how many times I need to fill in a week. Now that I am in a small car rather than a large SUV $25/week is a great place to start. I further buffer myself by going $50/pay on a card. If I use it up before my next pay I have a gauge for my budget and I up the amount. If I have a particularly good budget week o will put $100 on it and that gives me a nice buffer before I have to reload card. :-) hope that helps!
I am so inspired! I just graduated from college with a considerable amount of debt. I am praying to God that I can overcome this challenge. I don't know you or your husband but it gave me comfort to know that you both paid off $61k! What an achievement :)
Thank you...what was your major?
Supply Chain Management
No debt. And I still do this. and love it.. gets a little crazy sometimes lol..
1000 likes....you guys and gals are awesome...thank you!!
best explained! thks
Thanks for making this video! I came across your video when I first learned of the zero based budget and i like how it was laid out plain and simple and written out since I'm a visual learner! After I shared your vid. with my husband, he understood what I had been trying to tell him and agreed to put this to the test! We are now 5 months (10 pay checks) in, and we have gotten from $13,000 debt to $3,000 debt! Never in our entire 6 years of marriage we have seen eye to eye on finances until now. I love how we are both on the same page and we both know where we stand. It has taken ALOT of work, sacrifice, patience, and math to get this far... But I can finally say, we are successfully moving forward! It's wonderful! So thank you for helping our marriage, our finances and steering us on the right track :) you rock!
+Joleena Drolet Wow! So happy for you and your husband!! Good job sticking with it and sacrificing. Thank you for watching!! :))
The whole basis for this kind of approach to budgeting is prioritizing debt reduction. The real benefit (and found money) is when you can begin to engage in debt avoidance. No car loans, no mortgage, no credit cards.
Discipline is the key and I never used an envelope system. I always use a debit card to keep the "extra" money out of my minds eye. I don't even carry cash in my wallet.
It is funny how cash is the item I burn through. When it is on a card, I almost get whiny about having to find it, take it out, swipe, read a screen and type something... omg, I hate it.
Kevin Knorr
My wife and I recently started following Dave Ramsey and learning how to really deal with our money. We have been really hyped up about it, but having a hard time really understanding how to apply it. This video really helped. Thank you so much.
*subscribe*
Zack Morris Thx Zach!!
This is something kids should be taught at school so they can manage their money later on + teach their parents that might struggle with financial planning. Simple video, explaining simple concept, but for some reason it seems it is so hard for way to many people around. Thanks for the video. Good job!
agreed
+qmam Thank you....yes...this should be taught at a young age and then reinforced through school.
Zero-based budgeting can be described as "starting from scratch" or a "bottoms up approach." Instead of beginning with a set of presuppositions, you simply begin with the question: What is my mission, and what are the critical resources and activities needed to fulfill it? By answering that question, you isolate the things on which you should be primarily focused.
ZBB is advantageous because it illustrates the importance of certain resources. Likewise, it's the best way to ascertain the tasks that must be completed. In other words, it reveals the critical activities, and therefore the critical path, of a specific project. Such knowledge is integral to fulfilling one's goals more expediently and efficiently, for by identifying the critical activities--and by extension, the critical resources--you can avoid overspending in areas where it may seem prima facie necessary but is actually unnecessary.
ZBB often supplants incremental budgeting, in which you add to the budget from the previous fiscal year. The latter kind of budgeting can be problematic in that it often causes one to hold onto activities or resources that are obsoleted by the present economic climate. It also supplants open ended budgeting, in which one proceeds from the assumed premise that allocations can be granted without limitation. In contrast, ZBB begins with a scenario in which a program doesn't exist, and proceeds by determining the essential components for bringing it into existence. To a certain extent, it also proceeds from the question of what would happen if such-and-such a program didn't exist, whereas all other budgeting techniques assume the program's existence.
Unfortunately, ZBB never gained much traction in government because the assumed premise on which it's based--the nonexistence of an entire program--is often politically unfeasible.
just a thought you can buy a prepaid gas card with every paycheck then you don't have to worry about going in the station
Nice, very practical, no stickers , no manicure no Ramcy notebook, no expency wallets. I REALLY LOVE YOUR ADVICE.
Thanks so much for this video! I have watched countless budgeting videos that gave me the round about way to use this system and you were very clear cut and a light bulb went off in my head 😊 and it all made sense, you have helped a me a great deal and lifted alot of stress from my shoulders .. this is why I love RUclips and why I THANK YOU and your wife for sharing your best practices !!!
Cool...thanks..let us know how it goes.
PAY YOURSELF FIRST. Even if it's just $10, save it for your retirement nest egg. Then save up an emergency fund. Being in debt only matters to people that have something to repossess or seize. FICO is mainly for getting credit, which you should be trying to get away from....
Cut the expenses that you already have. You don't need weekly manicures, car washes, restaurant dining, cable (yeah I said it lol), drycleaning, name brand food stuffs lmao, don't drive everywhere, these kinds of changes will help you SAVE money. This video teaches how to MANAGE money.
Why not buy the house first, put an rv in the yard, rent the house, live in the rv free, and then payoff your debt with the rent income and your paycheck excess?
How about no. Money is actually simpler than that. You don't need to buy an RV and live in it for years in order to win with money. Also, emergency fund comes BEFORE saving for retirement. An emergency is just that, and you will go into debt without one
@@jeffwvu4602 emergency funds don't earn interest. But whatever.
@@hershekissed Gains from the ups and downs of the stock market will mean nothing when people are paying interest to banks for their massive credit card debt because every time an expense pops up, they'll just put it on the card.
@@hershekissed But you could probably save for an emergency fund and put something away in retirement at the same time.
@@jeffwvu4602 yeah but savings don't earn much interest. And planning for retirement is pointless if you're dead lol.
Thank you for the video! Very in depth about the envelope system and answered a lot of ?s I had about it. My wife and I (both 23) with an 11 month old baby are working on paying off our debt. Our snowball started at about 300 a month and is up to 800! I really think it will be a lot bigger now that we will be implementing this system, once we work out the kinks and numbers. Thanks again and Congratulations on the debt payoff!
This video is very helpful for someone like me (easing into adulthood lol). Thank you very much!
Tierra Shanice im on this same thing except I have no where near as much money as this guy loll
We just wanted to thank you so much for this video. We've used this system for about 3 years now and are now out of credit card debt and have just closed on our first home! Admittedly our incomes increased while this happened, but it helped us keep our spending managed so we could resolve all of our debt. Thank you again for sharing!
My wife and I are starting this. We have been trying for about a month now and it's hard to figure the allocating out. This video showed us our many mistakes. Thanks for the help, now I think we will get it right. haha.
Awesome, keep at it....you'll get it down!!
I love this video. I saw this video a year back and started my debt free journey
I started my plan to get debt free on July 16th. I'm a single mom of one. I am 25,000 in debt. Almost 9k from the custody battle and 16 from student loans for a degree I never finished. I plan to be debt free in 2 to 3 years. Thanks for the step by step help.
brit thank you for stopping by, let us know how it goes!!!
wbhomesteader
I started a blog called Live Like Brittney to help me stay accountable to my goal. My second post will be about how everything that is broken just needs the right tool and the right tool for me is the zero based budget. I'll be linking to your video. It was the perfect step by step for me and I really want to share all of the knowledge I've gathered with my readers. It would be awsome if you guysed would follow me on twitter/facbook and on livelikebrittney.blogspot.com/
LiveLikeBrittney I read your article and loved it....Can I share it on our FB page?
Yes please share it!
This system really makes sense to my brain. The way you've written it out makes it really easy to understand. I've been unable to successfully keep a budget or workout and envelope system before this and was totally discouraged. I think if I watch your video a couple more times I'll have it under control.
I call it a normal buget :) nicely done. We always do it like this.
Learned it from dad:)
Quicken,mint,budget for dummies,dave ramsey etc.. the way you put is alot better than any other. I literally jumped out of bed and grabbed a pencil and paper and started noting things down. Thank you very much!!!!!!!!!
Awesome....ty for watching
Best video I've seen so far! Thank you!
Thank you!!..:-)
Yes! Thank You! My husband will be watching this video today after work. I am so excited for him to watch this :)
I'm going to do this.
I am going to start this when I get paid next week....This is a great idea and you guys paying off that amount gives me inspiration.
Dale Keener Great...let us know how it goes
1600 every two weeks damn that good i be lucky to make 1100 every 2weeks
Nick Quest. Shit I don’t make that in a month
I watched your video years ago and never forgot this. Thank you for sharing
Thanks for doing this. I use something similar but with a spreadsheet.
Greatest thing i seen so far about money.(just starting to get in to this).
Goal is Not to touch the money from each envelope and be fugal. Warren Buffet has done this.
steve b
If you see the time when I posted it was late at night. Yay, you corrected me missing one letter. I knew that and everyone else knows what I'm talking about. Enjoy the block hater.
This is a very simple system for people to use. Most people need a system like this. Good job on the video guys!
Awesome Awesome Awesome Stuff!!!!!
+DeAngello Brown ty!!..:-)
This is by far the best video on how to budget I've seen thus far. No hidden agenda to sell anything. I just started this up last paycheck and should start seeing a brighter light towards late August to where I can start the debtfree snowball effect.
ec91001 Awesome man...thank you for the kind comment. We are just trying to help....no catch!!
What are house prices like in your area? Here in Dublin, Ireland we could NEVER save enough to buy property with cash. It's €200,000 for a tiny two bedroom home here. Congratulations on being debt free. We're extremely lucky to have no debt. College fees are state paid and credit cards are extremely hard to get nowadays.
Rebecca Sankey Thank you...:-)
Home prices are still depressed since the housing crash in 08/09...a tiny 2 bedroom would be probably €60,000. Also Dubin I assume is a larger city? Prices in large condensed cities here are probably the same price. We live in a rural area and paid very little for our first debt free place.
Our $14k (Paid For) Suburban Homestead Property
Wowzers!! We're currently bidding on a house about an hour outside dublin and asking price is 150k!! It's a 1400sq metre 4bed house so a lot bigger than city houses but my partner works in the suburbs. He'll have an hour commute. Poor man :( congrats on your home!!!
Rebecca Sankey Yeah ours is only 900 sq ft and a very small 2 bedroom mobile home...lol
Thank you so much for your tutorial. I'm new to this envelope system. It's great.
I have been using the envelope system for years and it is really effective
Just wanted to stop by and say thank you for explaining this in lay-mans terms. We have started to tackle our debt, and we feel very confident your system will help us achieve just that. We are only in the beginning stages, but surfing through and watching hours of countless videos on failed systems, we feel very confident after we watched your video. Thank you!
RYAN MAKO Thx..:-D...It works we have been debt free since 2012 and now own property and we are investing heavy in retirement
cant imagine driving around paying bills. uk everything is a direct debit anyway
Wow! I started doing this in February 2017 and I tell you it changed my life. I was using one excuse after another but that was just in my head. I have found about £350 in my budget that was unnecessary expenses. Sold one car and a lot of crap. Paid back around £7000 debt in 8 months and still paying minimum on every debt. You guys are right but it might take time for some people to understand. Thank you.
Okay so did I pick it up right? You are saying to work on the lowest balance credit and GET THAT ALL PAID OFF FIRST and then work my way up to get the rest paid off? But then again you have your monthly payments?!
+Sabriya Pinkney yes. make monthly payments on all credit cards; then apply what is left over to your lowest CC balance.
You can do lowest balance first if you need that morale boost. He said not to focus on interest rate if you're paying off that much a month which is true. The savings are minimal if you're paying off huge chunks, assuming you Donna have big differences in interest between cards/loans. If we're really honest here, focusing on debt going to 0 is not a good idea if it's going to take you more than a year or two. I would invest that money you'd be spending on paying down debt. It all depends on you and your situation though.
Just discovering this gem! This video was perfect in helping me set up my budget
$1600 - $840 = $760 not $750 😎
The basic concept of your budget is
Use any surplus money to pay off your lowest total debt first. I don't agree with this. Interest rates do matter, especially on credit cards.
Why blitz a credit card with extra payments when it could be $3000 debt sitting at 0% when you have another card with $4000 debt sitting on 27.5%?
Makes no sense other than you will feel better having wiped another card off your creditor list. But this will cost you more money and take longer to clear all your debts over all.
My tip would be anywhere you see the word credit replace it with the word debt.
it makes it ugly and not so tempting anymore! Credit card=DEBT card
6months 0% credit-6 months 0% DEBT
Interest free credit-interest free DEBT
this is good because it helps you get momentum and see DEBT disappearing. It's a matter of seeing your efforts pay dividends and encourages you to tackle the next smallest debt. Hence why it's termed the DEBT SNOWBALL
Owolabby Azeez
The debts won't disappear if you ignore the high interest rate debts. If anything this is the worst thing to do and you risk bankruptcy as the high interest debt can spiral and you no longer can afford your monthly payment cause you've spent your extra cash paying off a 0% interest debt when it could have sat there happily for a year.
It's not about the math part of it. Its about momentum. More people will get out of debt completely by paying off the smallest first. They get a rewarding feeling and are more likely to stick with the program. Yes, paying off the highest IR first is the better math thing to do, but if they are going off of math, they wouldn't be in this spot in the first place.
Going though Financial Peace University now- I needed this video to clarify how this works. Trying the budget tonight for the first time- and giving myself a 3 month grace period to get the hang of it. Thank you!
Coleen Pence Your welcome!!! Glad it helps!
Thank you! My husband and I are starting this next pay period. Thank you for explaining in such detail. Seeing numbers really helps me.
you're welcome, good luck...comment back if you need help!!
dude i actually found this extremely helpful specially since ill be graduating high school and parents need me to man up and tackle the world on my own, thank you very much i feel this will get me to break the cycle of my family being not so great with money!!!!
good luck, sincerely, Matthew. Life is harder than it seems and thanks to the federal reserve devaluing my, your, and everyone's dollar at least yearly since christmas eve 1913 thanks to woodrow wilson's ignorant help, you'll need to stay ontop of your budget and check book-game every month adn every year if you don't want to be a slave to debt. I speak from lesson-learned -the-hard-way experience. It is NOT a life you want to get stuck in.
Have you ever tried to climb a pole after getting automobile oil all over your hands, feet, and legs without any gear near by or way to wash away the oil? It's pretty much impossible and beyond frustrating. That's the way the longer you life in debt feels like year after year.
If you family and possibly yourself is like myself a year back, and my family, start your savings-change of mentallity- small. Perhaps instead of 10% of what you make, start with only 5 or 3%. That way the amount you put in savings envelope is so small you won't even miss it. AFter a month or two, it will become like breathing and walking that it is so easy to do and thoughtless.
NOW pump it up to 10% for another two months if possible. Look at what your expenses are. If you are lucky enough to have none except for putting gas in your car, then start saving at least half of what you make each pay check.
By the time you're mature enough, (**no offense when I say that because in all sincerity I personally didn't grow up COMPLETELY until around the age of really 28 so I know how it is to be an old teenager 18 to 21 years old and life is your playground**), and old enough to think about buying a house, you'll be able to EASILY smack down a 15% or better down payment and pay that sucker off with a FIXED 15 year mortgage in that time or maybe even less because you'll already be mentally trained and ready for that tougher scenario when you REALLY have real bills.
No one truly knows how hard life is until he or she moves out of mom and dad's house and he or she must pay his or her ALL expenses. Soon you'll start questioning to yourself what is priority and ditching the things that aren't needed. That's part of growing up. It sucks, BUT if you keep yourself disciplined with managing your money, you won't have to do with many or any of your favorite expensive hobbies.
Cheers * toasts a 7 year paid off 2005 civic si your way *
Awesome Matthew!! Really check out Dave Ramsey's books and get smart with money- your whole life depends on it! :)
This is your idea and you're the orginal zero base budgeting youtuber. Thank you so much for sharing and uploading. God bless you.
You're welcome 😊
Well done and easily understood. I've been doing a budget for years but not calculated down to zero in this way. Thanks.
superslyfoxx1 yw!!...;-)
Great video. I'm about to start using this budget and I'm glad to see that it really works. I'm excited about becoming DEBT FREE!
+Eulis Hicks thx!! and good luck!
Really good information here. I get paid once a month and I set up an account I call the buffer in addition to a regular budget spreadsheet. Any overages I have such as utilities costing less than allotted...the extra goes to the buffer account. The buffer also gets paid a set amount for birthdays, holidays, garbage bill, the second half of the month...and anything that comes around at odd frequencies (as in not monthly). I totaled all these things up for the year and Pay On them each month. We never have feast or famine months, I never worry about vet bills or surprise graduation invitations because the buffer has a category for that. At the end of the year I calculate the actual amount spent in each category and raise or lower the amounts of each based on real costs. I've done this for years and it was the key to my early retirement.
Sounds like a very good plan..:-)
We started on 12/24. We didnt low ball our envelopes, started with amounts we will likely lower in 3 months. Just by setting up a no option to fail plan (no option to over swipe or spend ) we've already got $500 towards our $1000 goal!
Alicia Olson Holy cow, that was fast congrats. found money you didnt know you had??
Awesome....very glad we could help you!!
Bravo!!!! The first video that broke down the whole process. Thank you sir!
sheenaamaryy Youre very welcome..;-)
That's a great idea....we might try this!!!
thank you! I've been watching a lot of budget videos but this one just put the budgeting and envelope system into where it made more sense for me. I've been working hard to pay off my debt but with out the envelope system Im still swiping my debit card for food. I'm always blowing my food budget. I've only been really tacking my debt since Nov of last year and I've only been trying to get the zero dollar budget system down for a few months now do it was good to know that it takes a few months to perfect the system.
Praise the Lord!!! 61k is awesome! With God, nothing shall be impossible!
Yes thanks for the information it makes perfect sense I will be putting this to work today!
Very well done. I appreciate your help. I've been so bad with money. Really makes it real when you put pen to paper.
This video has changed my life. I wish I knew about this earlier in my life. The way you explained things just made sense. Greatful to have stumbled on this video. Thanks again for sharing this video. God bless
Thank you Frankie Palermo ....Glad we could help!
This is just what I need I always just swipe my card everywhere. Thank you for this video!
Macrina1818 youre very welcome!!
This works fine when inflation is very low. You know for sure how much you'll spend on each item. In places where inflation is above 5%, the prices go up faster than you can get a salary hike.
In that situation, this is what I'd suggest:
1. Repay the debt that charges maximum interest %. Bring that debt down completely. When inflation is high, the rates are higher.
2. If the inflation is 'x', plan to keep 2x as your monthly buffer. Don't budget it out. That envelope should only be used when prices have increased beyond budgeted limits. Make a note of how much was borrows from this envelope and the category that borrowed it. Use that info for your next month's budget.
3. Anything that remains from the inflation buffer envelope should go one part into debt clearing and another part into a deposit as savings.
4. Use a bicycle whenever possible.
5. Cook food at home instead of buying processed food. When you buy processed food, you are paying for the entire supply chain that brought that food into your hands. Processed foods are a greater good for the economy but cut down on them if you are burdened by debt.
Dave Ramsey is awesome!
My daughter told me of this method, and it works.thanks for sharing
Rose Aguilar Yes he is..thank you!
Great system and thanks for explaining it in full :)
This is one of the best videos I've seen on this. I think my brain has finally gotten how to make the budget! Thank you!
youre welcome
This is one of the most interesting videos I've seen, will have to try it. Thanks for sharing, very well explained.
Mariana Leon Thank You!!.:-)
Great video, we have been debt free except for our home for about 4 years now. FREEDOM!! :)
It's a great feeling!!
great video,you made it easy to understand what we need to do. we just signed up for the Dave Ramsey classes. thanks for the head start. we have about 10k in debt. we have set a 12 month goal to be debt free.
Great video. I just set up my envelope system and I'm very excited.
Awesome explanation of this, i never could understand it until you just went through it all in this video, Dave Ramsey is great as well.... love listening to his program whenever i can.
MrGattor33 thank you....glad you liked it.
Hi mate thanks for the video. Everytime I feel a bit out of track I come back and watch this video. very informational. Hope you are enjoying the debt free life!
Thanks...We are enjoying it.
Learning about this snow ball debt as teenagers neither me or my husband have ventured into debt. This system is not for us but hearing about it and how hard it is to get out from under it made a big impact teach teens how to start right. Emergency savings before your first bill.
That's awesome. Our kids will be taught this at a very young age and repeated through childhood. Get them started off on the right track.
The best budget system ...I have been wishing and glad I found this video.
Thx
Thx Austin....glad to help....I was horrible with money too. I just got sick and tired of being broke.
im going to +1 this simply because you follow Dave Ramsey like I do :) it's an amazing feeling when I can pay what little bills I have and STILL have money left over to fund my retirement.
Excellent advise. I am reading Dave's book, Money Makeover now but liked that I can see this explained so simply. Thanks
You're welcome! Good luck! :)
Loooove this! ! Thank you so much! This really motivated me to get back on track and pay off some debt! !
Agata Gottschalk Thank you!!
I am trying to learn how manage money before I get an apartment with my husband, and I took notes on this, thanks!!
Tiffany Fischer yw!
Im so glad you shared this! Actually bought the Dave Ramsey Kit and an envelope system filer from Etsy! Im am so excited of paying my debt off and be debt free. Just want to mention that you stated a good point in not borrowing money again! I was actually planning to buy my first house soon!! And we definitely rethink and buy it cash! Because you are so correct in saying that credit card and loan company want you to pay it off later rather than sooner so the interest rate racks up. We end up paying so much more. So happy I watch this! Im definitely going to share this with my husband. Would love for us to do this together.
Awesome....I hope the best for you. Good luck with it...:-)
Thank you for making this video. It really helped our family.
Thanks for breaking it down for me, i was so confused until now.
thx
I'm going to run this through with the husband. Sounds like a great plan to start paying off debts and hopefully able to save a little. Thank you!!
Mai Lee Yang Thank you!!
This is a great video!!! I am so excited about starting my own self sufficient journey.
I am a frugal mommy blogger and I love this video I'm going to try this for a few months. I have a really big move across country so I hope this works.
This is going to help us! I can't wait! My question is what about automatic drafts that we have no say about when they are paid? Do you ever encounter that and does it throw you off?
I do this but electronically with YNAB software. Works so well and we're in a very different financial position thanks to this system.
Thank you for the step-by-step instructions on how to do a zero-based budget! Congratulations on getting out of debt
farahp23 tyvm!!
excellent job man. I cant believe how easy it is
Thank you, I finally understand how to do this. I appreciate that you did this video. I'm a visual person and you made it simple for me. Good job paying off your debt. I'm just starting.
Financial planning is key, and nice to plan ahead
Awesome job at breaking it down!! Great video!
This was very imformative, thank you for taking the time to inform those who are striving to become debt free. Ive done financial peace but i like the way you've put it.
Thanks for this video. I helped me to understand the envelope system. I will let you know how it work for me.
I would suggest doing the zero based budget in a program like Quicken or equivalent. You will just have to spend a little more time keep track to make sure you go over budget since you will be using debit card instead of cash.
But if your just starting out with this system, I would suggest doing the envelopes so you get used to budgeting.
I will be making a video of this soon because I know a lot of people have a hard time committing to using cash only.
Thank you...it took us a long time, but well worth it.
I get asked about this quite often, so I was going to make a quick tutorial myself. I'm glad I searched first though because you saved me the hassle of setting up the camera, pen, and paper myself.
Thank you for making this. I'll be adding this to my favorites to share with anyone who asks.
p.s. Love me some DR!
HelloIamClay HAHA...awesome man thanks!!!
Thanks for the information. Well put and easy to follow steps. Thanks for sharing!
I didn't know what this was gonna lead to and seemed wierd at beginning but it really makes sense. I'm hoping this helps. Thanks for sharing.
Leila, we use envelope budgeting software instead of paper envelopes at home. Money is put into 'virtual' envelopes. When you spend money using a card, you enter that transaction into the software and it takes the balance from that envelope. We use YNAB budgeting software, based on envelopes and is zero based. Android and Apple apps are available so you can enter your spending live with the transactions synced back to your MAC/PC. We have paid off over £70,000 in three years!
I actually did something similar a few years ago, which worked for me. I get paid twice a month, with the first paycheck I paid all my bills except for rent, and then with the other paycheck I would pay the rent. after those payments I would end up with about the same amount in each paycheck. I would then divide left overs and allocate 1/2 to debt and 1/2 to savings. It really works. When you analyze how you spend your money, you begin to get better at knowing how much money you will have left, instead of just swiping the card left and right without keeping track of expenses. I started with the lowest debt and then as I paid them off moved on to the next lowest debt. I also noticed that interest didn't really matter because i was paying so much more than minimum that it didn't make a difference. Also, I would always round up the bills to pay a little more on the cc.
Soledad Fernandez That's a great plan....that's the thing..you had a plan!!
wbhomesteader That's half the battle. A plan.
i love your explanation on this! you made it easy to follow and to the point! thanks for giving me the tools to get out of debt!
Youre very welcome