When You Get a Raise, Ignore the Extra Income for a Couple of Months.
Raising your pay is one of the best reasons in your career. However, instead of immediately adjusting the budget to match the new salary, wait a couple of months.
As the personal finance blog Money Ning points out, your salary change may not match your actual salary change. After accounting for taxes and other expenses, your increase may be less than you expect. To get a better idea of where your finances will be after the boost, wait a couple of months before changing your budget:
Is it necessary to immediately allocate an increase in income? Will there be any negative consequences if you don’t? Absolutely not. If you don’t have immediate needs, the smartest course of action is to sit on it for a while. Wait a few months so that you can get a feel for your new financial situation and carefully consider all your options. Waiting often chills the impulse for additional costs and makes it clear which updates are necessary and beneficial, if any. Watching your funds accumulate is also a rewarding experience.
Unless you have bills that you absolutely need to pay in a raise, the wait isn’t all that bad. You will create a good buffer and have a better idea of what your real budget will be before you start deciding what you want to spend your money on.
Four Things To Do When You Get A Raise | Ning’s money