So you got a raise? How you can make the most out of it!
Celebrate (just a little bit)
First things first, Yay! Congratulations!
Buy yourself a little something or take yourself out to a nice lunch to celebrate all your hard work, you deserve it.
Reassess your budget
Wait a little bit and see what you’ll actually be getting extra in each payday, you may be surprised by how much of your raise actually goes to taxes. Once you know then you can make adjustments to your budget, remember that you got by before this raise so this is all gravy.Avoid lifestyle creep, it can be so easy to have this kind of money absorbed back into the budget and be left with nothing left at the end of everything. After you’ve reviewed your budget, start thinking about where your raise is going to do the most good.
Do you have an Emergency Fund? What about Debts?
If not now is the time to stack up the cash for this to help protect your financial life.
Once you have this, it’s time to pay off any debts you might have. Tightening your belt and living frugally now can allow you to clean up past financial missteps so they stop taking a toll on you. I’d recommend working your way from smallest to largest and rolling the ball down the hill until you are debt free. This will free up extra income that you can then direct to your other financial goals.
Once, you’ve done that it’s time to plan for your future. If you’ve been living on your previous income then this is an awesome time to really get ahead.
Invest in yourself!
Salary sacrifice your raise into your superfund and let the power of compounding interest work its wonders.
Using this money to pay for courses and courier improvement, can help you make more money in the future.
Investing in your passion projects, While working away at our 9 to 5 jobs can be tiring and draining, but if you have a passion project that one day you might be able to use to help supplement your income in the future.
You’ve worked hard and earned your raise fair and square, but it isn’t a windfall. Make sure your money is working as hard as you are. You don’t want to be stuck at the end of the month trying to work out where all that extra money you got went.