How can i use paypal for my funding source

I've set it up and authorized it thru paypal, but it still does not pay my ballance.  I can't update any apps or even download free ones, because I have a $2 ballance.  I want to use my paypal account to pay this.  Any ideas???

Ok...  I thought you were referring to the store on your iPhone.
On iTunes on your computer, you selected PayPal then clicked Continue then logged into your PayPal account?
I don't think it's PayPal that's the issue. $2 for an app...  you have to take into account taxes and fees that may apply to your location, whether in the United States or abroad. $2 may not cover the total cost of the app.
Click Tax top right corner on this page >  Payment & Pricing - Apple Store (U.S.)

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