Being called into the boss’s office is no one’s idea of a fun day at work, unless it is to learn of a promotion or a boost in salary. Getting a raise can really help keep your finances on track, and can even give you the means with which to start a savings or emergency fund. While it may be tempting to put that extra money towards a new car or bigger house, there are other things you can do with your raise that will help you make the most out of the extra dollars on your paycheck.
Some things you can to do make sure your dollars aren’t stretched too far after you get a raise include:
- Budget, budget, budget! When you have extra money in your pocket it is critical to know where it will be spent. Identifying where your money goes gives you the chance to find ways to cut back, and start putting something aside for a rainy day.
- Designate a portion of your newfound wealth to a savings or retirement account every paycheck. You can even set this up to happen automatically, by a recurring transfer from your checking to your savings account or by increasing the amount you contribute to your 401(k). If you never see the money hit your account, you will be less likely to overspend.
- Put the extra cash towards debt. Whichever debt repayment method works best for you, take the extra boost in your income and put it towards those goals. You will pay off your debt faster this way, and once the balances are eliminated you will have the extra income from your raise as well as the extra money from not making monthly payments on recurring loan balances.
The key is to behave rationally. If you need to sit down with pencil and paper to figure out how to best use the money from a raise, do so! Financial planners can help you make the right choice, and we can help if you need to negotiate with lenders or take other action regarding your debt. Call us today to learn more.
If you have questions about budgets and how to save for a onetime expense, call our office for answers. Call a Plantation, Florida debt relief attorney today for more information.