Well, it looks as though congratulations are in order. You’ve been flat out putting in more hours at the office than there are in a day, but all of that work is finally going to pay off—literally. Management has at last recognised the value that you bring to the team, and decided that a bit more monetary compensation may be in order.
That’s right, you lucky devil, you just got yourself a raise.
But before you turn your fat new pay check into a weekend of unrivalled proportions, take a moment to consider where your money should really be going. Chances are you’ve got expenses that could use some of that extra cash, and the mature (boring?) thing to do would be to put that money where it’s really needed. So, to help you get started, here are seven things you should do when you get a pay raise.
Pay off debt
It can be hard not to rush off and celebrate your new found cash, but first ask yourself: Is this money really yours? If you’re living in debt, then, no, it’s really not. High-interest debt—such as credit card debt should be the first thing that you take care of, because the longer you put it off, the more you’ll end up paying. Does this mean that you should live in poverty, putting all of your income into paying off your car payments and home mortgage? No. But it never hurts to consider these things, especially when you get a raise.
Save it up
Just because you have some extra money now, doesn’t necessarily mean that you’ll never have money problems ever again. Placing a portion of your increased income into a savings account, either for a specific purchase, a child’s university fund, an unforeseen emergency, or for any other goal or reason, is a great way to make sure that your money goes towards something important. Keeping it in a separate account from the money that you use on a regular basis will not only prevent you from using it carelessly, but will also earn you interest over time.
Although investing is inherently risky—at least when compared to saving—it has the potential to offer a much larger pay-off in less time. Additionally, there are far-less risky options that make investing seem less like gambling, and more like, well, investing. Speak with a financial broker and see what your options are. After all, having money is good, but having money that makes you more money is even better.
Review your insurance
You never know when something terrible is going to happen. From unforeseen illnesses, to automobile accidents, to damages to the home, no one ever seems quite as prepared as they could be to deal with the unexpected crises that find their way into everyday life. Of course, you can change that for yourself. Consider taking some of your increased income and using it to bolster your insurance coverage. There are few things more valuable than peace of mind, and with the right amount of insurance, you won’t have to worry so much about what the future might hold.
Add to your super fund
It’s been said that you can survive without money when you’re young, but not when you’re old. Superannuation or a retirement fund allows you to set aside a small portion of your income every month, so that once you’re ready to retire, you’ll have a nice nest-egg to help you enjoy your golden years. You can use your raise to help that nest-egg grow, by increasing the percentage of your pay check that is applied to your super.
Spread it around
While you’re busy celebrating your personal success, don’t forget about those out there who don’t have it quite as good as you do. You can help these less fortunate by taking a portion of your new income and giving it to charity. Donating your money may not get you any fun new toys, but it will certainly leave you with the good feeling that comes from helping others.
Hey, apart from preparing for the future, paying off debts, and helping the less fortunate, remember that it was your hard work that made this all possible. So, don’t feel bad giving yourself a little something in celebration. This doesn’t mean that you should dump all of your cash on one night’s celebrations, but there’s nothing wrong with taking your significant other out to a nice restaurant or going on a short vacation. After all, you’ve earned it. Just make sure that you’re ready to buckle back down once you return to work, because the only thing better than a pay raise, is the next pay raise.