Have you recently gotten a raise or a promotion? Making more money is great, but it also comes with new challenges. How can you make sure you’re managing your surplus income in a way that will be the most beneficial to you in the long run? Here are four tips for ascending in your career while maintaining control of your finances.
1. When you get a raise or bonus at work, don’t immediately adjust your lifestyle to reflect this newfound income.
It can be easy to think that a raise or bonus at work means you now have more money to spend on frivolities. However, it’s important to remember not to adjust your lifestyle immediately and overspend. Instead, try setting aside some of this extra money into savings or towards investing in something that will benefit you long-term like a retirement fund or real estate opportunity. A raise or bonus should not be considered a free pass towards buying all the things you have always wanted, but rather as a way to invest in yourself.
2. Save at least 10% of your increase and use it to pay down debt or invest in yourself by taking courses or learning new skills that can help you further your career.
While it can be tempting to use your salary increase to go on a shopping spree or book that vacation you’ve been dreaming of, it is important to consider other ways that the extra money could be utilized. Setting aside at least 10% of the increase will ensure that you have the financial stability and means to pay off debt or use the money towards your own enrichment. Investing in yourself by taking educational courses or learning new skills will help you advance in your career and open doors to future opportunities. By balancing both investing in yourself and paying off debts, you are setting yourself up for long-term success.
3. If you’re already debt-free and have been for a while, consider using that extra money to beef up your emergency fund so you’re prepared for anything life throws your way.
Having a solid emergency fund is quite possibly the most important factor when it comes to achieving financial success. An emergency fund will give you peace of mind knowing that you always have a cushion or safety net to turn to in case of unexpected events or expenses. If you’re already debt-free and have been for a while, taking this opportunity to build up your emergency fund could be one of the best decisions you make. Not only will it help provide greater security, but also prepare you for whatever life throws at you down the line. Save money now so that even if things don’t go as expected, you’ll have resources to fall back on
4. Once you’ve increased your savings and paid down any debts, then you can start adjusting your lifestyle to reflect your new earnings – but be mindful not to overspend!
Congratulations on increasing your savings and making strides to reduce outstanding debts – it’s no easy feat. But after all the hard work, you’re now in a position to enjoy life with your new financial situation. While you may decide to indulge yourself with a few luxuries, be conscious of not over-extending yourself. It’s certainly alright to treat yourself but don’t forget the progress you have made toward achieving financial peace of mind. A bit of planning, while cutting out frivolous spending can help ensure that you are able to hit your personal goals without compromising on fun or relaxation.
Congratulations on your new raise or promotion! It’s an exciting time, but it’s important to remember that a sudden influx of money can be dangerous if you’re not careful. Instead of immediately spending your extra cash, try to be strategic and use it to get ahead financially. You’ll be glad you did in the long run!
At The Humphreys Group, we believe that effective planning is as much about possibility as it is about responsibility. If you’re feeling stuck or unsure about what to do with your new surplus income, we can help. We look at your financial situation holistically and make sure that your decisions reflect your values, priorities, and long-term goals. Get in touch today to continue the conversation