Wednesday, April 24, 2024

Congratulations! You just got a raise at work. This likely feels great and is a culmination of all the hard work you have put in. However, the adjusted income is also naturally going to come with an adjustment in how you operate your own personal finances.

You now have more money to spend, so you will need to be careful about what you do with it. Here are some things that I would recommend doing following your raise at work.  

Calculate Your New Monthly/Weekly Earnings  

When you got your raise at work, you likely were presented in the form of your annual salary. However, you also will need to get a handle on your weekly or monthly paycheck amounts to truly know how much money will be available to you on a more instant day-to-day level.

Make sure to look into this information and find out what your checks will look like following the withholding of taxes. This will be important in terms of how you format your next budget.  

Create A New Budget According To The Raise  

Lifestyle inflation is a common occurrence will people get a raise. Simply put, this is when you spend more money on your lifestyle rather than defer it to investments. We each have our own financial goals, so maybe lifestyle inflation does not bother you.

However, know that this will impact your ability to speed up your long-term savings and investments as a result. Know what you want out of your raise, and create a new budget according to this so that there are no surprises.   

Put The Extra Money Towards A New Financial Project  

If there had been something you wanted to do financially, but previously lacked the funding, the raise may have been the window opening for this opportunity. The raise is a great opportunity if you have been wanting to contribute more to your retirement.

You can work towards becoming active in the stock market or in cryptocurrency, or simply set aside more money for an emergency fund. Take advantage of the raise to spread out your own wealth and become more financially stable for the future.