Customize Your Budget With the PERK Method
Every budget requires periodic review. You need to be sure that your expenses are still in line with your income and monetary goals. The PERK method can help you get started.
Author and certified financial planner Robert Pagliarini recommends this method, which starts by listing all of your current and future expenses. From here, you are going to divide all expenses into four categories: defer, eliminate, reduce, or keep (hence the PERK).
Here’s a little information on each category from Pagliarini’s interview with Equifax:
Postpone : Items in this category might include buying a new car, remodeling a kitchen, installing a new carpet, or incurring lower costs such as buying a new TV or upgrading to an iPad2 … Putting aside gives you more money today so you can “save or invest, ”says Pallarini. It also helps to avoid impulse purchases.
Elimination : “This is where you really want to spend as much time as possible,” says Pallarini. “These are things that made a lot of sense at some point, but no longer have, and probably not so long ago.”
Decrease : This category is a goldmine of opportunity, says Pallarini. “Look at each of your expenses and ask, ‘Can I cut it down? “”
Leave it alone : Some expenses are compulsory, such as health insurance, auto insurance, mortgage payments, and rent. Mark them with a K.
It’s like taking an inventory of your budget. You make sure that all of your expenses continue to align with your income, priorities, and financial goals. For more details, check out the full publication at the link below.
Give Your Budget A FUNCTIONING | Equifax