A raise in salary rarely happens. You can enjoy your money all you want but don’t spend it all too soon. Just because you have more money now and that you’re going to earn significantly more later doesn’t mean you should get cocky and go on a reckless shopping spree.
Instead, you should think about how this is an opportunity for your financial stability. You have a lot of things to think about and this includes your debts and some expenses that might need to happen,
Calculate your new take-home pay
First of all, look at your current expenses and how much you were previously earning. You need to calculate your take-home pay so you don’t accidentally spend too much during your “treat yourself” day. There is also a need for laying down some rules for yourself in terms of the bills you need to pay and some of the possible additional expenses you might need in the future, not that you’re earning more.
Settle any and all existing debt
This has to be done next. You can’t keep living your adult life with debt hanging at your back. Before you go on and add some newer expenses and upgrades to your life, you have to pay off all of your existing debt using the raise percentage you are now earning. Once you are done settling all of that and making sure you aren’t forgetting anything, you can move on to step 3.
Build your emergency fund
Emergencies come at times when you least expect them. Don’t do this half-heartedly. Now that you have more money, you need to build your emergency fund in case something bad happens and you have to pay for it. Keep building this up so you don’t run out. It never hurts to be prepared. And it pays to be prepared ALL the time.
Contribute to your retirement
Alongside your emergency fund, you need to start contributing to your retirement too. Hopefully you started early, right around your middle-twenties. Now that you have more earned money, you can put some percentage of your raise to your retirement so you don’t have to choke up in stress and pressure when it’s too late in the future. That often happens to some people, when they think they could just hold off on contributing, right until the time when they DO indeed retire.
Do something for yourself
Okay, now that all that serious business is out of the way, there is no way you aren’t celebrating your raise in salary. Treat yourself to something great and go with your family or friends. A fun night out might be in order, but if you aren’t the type for socialising and you don’t have a family yet, then you can stay at home watching movies and eat all the food you binge-shopped that day. That works too.