Getting a pay rise can be an exciting time, a great reward for your hard work! I recently got a pay rise with the change of financial year. The problem is deciding what to do when you get a pay rise!
Many people don’t do anything with their pay rise. Just let it sit unallocated in their budget and frit it away. This is the worse thing you could do! In the words of Dave Ramsey you should have a purpose for every cent.
If you receive a pay rise you need to allocate to your debt or savings straight away. It isn’t a opportunity to spend more.
If you are in debt it should be made into a direct debit onto that debt every pay cycle. If you are not in debt then your pay rise should be put towards your saving goals.
My payrise (its only $46) will be going as an extra payment onto my mortgage every fortnight. It’s not a great deal extra but like with all debts, any extra payment makes a bigger difference long term.
Previously I have not done anything consciously with my pay rises. And my spending has unconsciously gone up, the more money you have (un-budgeted) the higher your expenses go up – I have found. So my suggestion is to get every dollar working for you. This means making sure every payrise – no matter how big or small – is consciously put on your debt or savings.
What will you put your next pay rise towards?