As you go further in your job, you will begin to learn more things and excel at the tasks given to you. As you advance, your superiors may choose to reward you by increasing your salary. This is an exciting time for many workers. Some work months, while others toil away for years to see that increased pay day come. Regardless of how long you’ve waited for this day, what really matters is what you do from this moment forward. So, congratulations on your raise. Now, make wise decisions with the increase.
Increased Spending Can Lead to More Debt
A major thing that people don’t realize is the affect a pay raise can cause on your lifestyle. Many take even the smallest raise as an invitation to increase their debt by getting more loans, buying a bigger house or car, or spending more with the credit card. Unfortunately, your pay raise can cause more harm than good if you don’t use it wisely. Danger lies in the idea that when you make more money you should automatically spend more money.
Act Like It Was the Opposite
If you got a 10% increase in pay, pretend it was actually a 10% decrease in pay. How would that feel? You certainly wouldn’t rush to the nearest car lot, Realtor or department store. By pretending that your increase was actually a decrease, you will be able to keep your mind focused on what’s important now that you have this little bit of extra money coming in this month. You can do great things with it if you simply make some wise decisions.
Cut Back in Major Ways to Leap Forward
Places like New York City offer tons of jobs and people get raises everyday. But instead of using their increase to pay off debts, they move closer to the ritzy part of town, and live well above their means, going into more debt and getting into a sticky situation. Don’t follow that path. There are plenty of Long Island storage units where you can store your things. Move out of your current home into something smaller. Pay off all your debts and put your extra money into a savings account. Then, and only then, should you look for that condo in Manhattan.
It doesn’t matter if you live in NYC or San Francisco, the logic remains the same: use your raise wisely, not frivolously. You will feel free and clean once you pay off your debts, then you can move on up in the world with a guilt-free conscience.