Every budget needs an occasional check up. You want to make sure your spending is still in tune with your income and money goals. The PERK method can help you get started.
Piggy bank and stethoscope image via Shutterstock
Author and Certified Financial Planner Robert Pagliarini recommends this method, which starts with making a list of all of your current and upcoming expenses. From there, you’re going to organise each expense into one four categories: Postpone, eliminate, reduce or keep (hence, PERK).
Here’s a little detail on each category, via Pagliarini’s interview with Equifax:
Postpone: Items in this category could include buying a new car, remodeling a kitchen, installing new carpet, or incurring a smaller expense like buying a new TV or upgrading to an iPad2…Postponing an expense gives you more money today so you can save or invest it, Pagliarini says. Plus, it helps avoid impulse purchases.
Eliminate: “This is really where you want to spend as much time as possible,” says Pagliarini. “These are things that made a lot of sense at one point but don’t anymore and probably haven’t in a while.”
Reduce: This category is a “gold mine of opportunity,” Pagliarini says. “Look at each of your expenses and ask, ‘Is it possible for me to reduce it?'”
Keep: Some expenses are must-haves, like health insurance, auto insurance, mortgage payments, and rent. Mark these with a “K.”
It’s sort of like taking an inventory of your budget. You’re making sure all of your expenses still match your income, priorities and financial goals. For more detail, check out the full post at the link below.
Give Your Budget a PERK [Equifax]