We’ve been told so many times that to get a handle on our money and boost our savings, it’s really rather important to have a proper budget.
Yep, we need to get past our fear of checking our bank balance, take an honest look at our income and outgoings, and work out exactly how much we can afford to spend and save.
We know this. What we don’t always know is how to create a budget and stick to it.
Vince Scully, a leading wealth consultant management, has revealed his trick for sorting out a budget that works for you – and it’s definitely worth a try.
He told FEMAIL that his money-saving mantra is the PEARL technique.
PEARL stands for Postpone, Eliminate, Avoid, Reduce, and Love.
What is the PEARL money technique?
The idea is that you sit down and make a full list of all your expenses (yes, every single one), then categorise them into one of the five letters.
Could they be postponed? Should they be eliminated entirely? Should you avoid them? Should you reduce this expense somehow? Or do you absolutely love this purchase?
The PEARL trick
The idea of PEARL is to sort all your expenses into one of these categories:
Things that go in the Postpone category include regular spends such as haircuts or clothes shopping. If you’re doing this every four weeks, simply postponing the spend so you do it every five weeks instead could save you a lot of money longterm.
In the Eliminate category should be any subscriptions or memberships you’re not using, such as a gym you never go to or magazines you get delivered but never read, plus any purchases that just aren’t bringing you any joy or doing something essential.
For the Avoid section, place situations and circumstances where you end up spending more money than you planned; like going to after-work drinks or going on an online shopping spree after a long day at work. These aren’t things you necessarily want to get rid of entirely, but spending times you want to steer away from most of the time.
Pop any spends that you might be able to cut back in the Reduce pile. This might be your daily coffee (could you make your own for less?), your phone bill (call up and see if they’ll offer a better deal), or your weekly food shop (try hunting down yellow sticker deals and going to Aldi or Lidl rather than the bigger supermarkets).
Then in Love, list the purchases that you genuinely adore, that bring you happiness and that make your life better.
You might be a total foodie – so an occasional nice meal out is a reasonable expense to factor in. You might love clothes, so that’s where it makes sense to spend a bit more money.
Using the PEARL technique can help you take an organised look at your finances, and then you can readjust your budget depending on these categories.
‘Stop thinking about a budget as cutting things out, like being on a diet, and rather think of it as a spending plan, like a nutritional plan,’ said Vince.
‘It’s about living the life you want with the money you have.’
If you want more tips and tricks on saving money, as well as chat about cash and alerts on deals and discounts, join our Facebook Group, Money Pot.
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