More Money: What to Do When You Get a Raise

When it comes to making more money, you might contemplate how to handle your finances now that you have some extra cash coming in. If you’re already doing well financially, you might be tempted to ignore extra savings and start living a bit more lavishly. Before you do, stop. Extra money each month does not mean you should spend more. If you’re already living comfortably, your bills are paid, your savings account is healthy and growing, don’t fall into the trap of considering your additional income as “extra fun money.”

Save More

If you received a raise or you’re making more from some other means, use it wisely. Don’t assume that just because you have extra funds each month you can spend that extra. Save it. This isn’t to say you can’t have fun with your additional funds, because life needs a little fun, but the truth is that you need to save more. Put half of it into your savings account each month and put the other half in a different savings account. Make the second savings account your fun money account and use your fun savings to save for a new car or a great vacation.

Keep Budgeting

Just because you have enough money to live well each month doesn’t mean you should skip the budget. Your budget helps you stay on track financially. It also helps prevent you from wasting money in places you don’t want to waste money. A budget is something you should have no matter how much money you make.

Pay Off Your Debts

Even if you haven’t any credit card debt, you probably have other debts. Use your extra money to apply higher payments to those debts. This could include anything from your car payment to your mortgage so that you can save money on interest over the long run.