At the same time, you likely feel like splurging a bit. The key to navigating your new income lies in knowing when to spend your money and when to save it and why.
Here are some tips.
Your savings account acts as a buffer between you and life’s vagaries. You never know when you might lose your job or experience a serious illness. Having money in savings allows you to better weather these situations. Up to 20% of your paycheck should go towards savings.
The more money you have to pay out in debt every month, the less you have to put toward your savings, retirement, and even an occasional night out. When you get a raise, you have an opportunity to put more money into your debt.
While this may be a drag in the short run, it’ll be your ultimate freedom in the long run. Debt ties up your money and offers you no return in the process. In fact, it usually costs you in interest. Your raise allows you to put more toward your debt, freeing you from its trap a lot sooner.
Having more money gives you more options when it comes to living arrangements, including leveling up. However, it’s important to level up consciously, so that you’re also living strategically.
For example, take luxury apartments. If you’re a designer or an architect who designs high-end homes and apartments, where you live could have big career implications. You need to demonstrate your talents in this field.
If you’ve gotten a raise, then it’s likely that you’ve worked very hard to get to where you are. Getting out of town for a few days or even a week or two offers you a practical and relaxing way to enjoy some of your newfound wealth.
Savings
Your savings account acts as a buffer between you and life’s vagaries. You never know when you might lose your job or experience a serious illness. Having money in savings allows you to better weather these situations. Up to 20% of your paycheck should go towards savings.
Pay Down or Pay Off Your Debt
The more money you have to pay out in debt every month, the less you have to put toward your savings, retirement, and even an occasional night out. When you get a raise, you have an opportunity to put more money into your debt.
While this may be a drag in the short run, it’ll be your ultimate freedom in the long run. Debt ties up your money and offers you no return in the process. In fact, it usually costs you in interest. Your raise allows you to put more toward your debt, freeing you from its trap a lot sooner.
Level Up Your Living Arrangements
Having more money gives you more options when it comes to living arrangements, including leveling up. However, it’s important to level up consciously, so that you’re also living strategically.
For example, take luxury apartments. If you’re a designer or an architect who designs high-end homes and apartments, where you live could have big career implications. You need to demonstrate your talents in this field.
Your living space is one way to do it. If your higher income allows you to spend in a way that actually makes you more money in the end, then it’s worth spending a bit of money to make a little (or a lot) extra in the long run.
Get Out of Town
If you’ve gotten a raise, then it’s likely that you’ve worked very hard to get to where you are. Getting out of town for a few days or even a week or two offers you a practical and relaxing way to enjoy some of your newfound wealth.
Some time away allows you to recharge your batteries and gives you a fresh perspective, which will ultimately help you in your work life once you return home from your vacation.
Getting a raise represents only half your monetary equation. You must also know what to do with your new influx of money. The key to being responsible for your newly acquired cash is to spend it in a balanced way.
Getting a raise represents only half your monetary equation. You must also know what to do with your new influx of money. The key to being responsible for your newly acquired cash is to spend it in a balanced way.
