Getting a raise is great. These 11 tips will make it worth 10x more:
Scoring a raise is huge! But more cash will only take you so far. If you leverage that cash in the right ways? You can 10x the value of that raise over the course of your career. Here’s how:
1. Assess Your Finances:
You want your money to work for you, not against you. You can’t do that unless you have a clear picture of your finances. This free assessment will help you do that in <5 minutes: Wellness Quiz
2. Ask Yourself 5 Questions
- How Much Will I Make Every Month Now?
- How Much Do I Currently Spend Every Month?
- What Do I Spend It On?
- How Much Debt Do I Have?
- How Is My Money Working For Me Right Now?
This will dictate where you allocate the new money.
3. Calculate Your Paycheck Paycheck
City has a great tool to calculate your future paycheck. Plug in your salary, location, etc and watch it spit out a number. You can use it as a rough estimate: Salary Calculator
4. Cover Your Current Costs
Your first goal should be to cover your expenses Audit your current expenses and cut where you can. Then see how much is left and subtract that from your new paycheck. What’s left over?
5. Pay Off High-Interest Debt
Review all of your debt. Rank them in terms of interest rate (from high to low). Your first goal should be to pay off high-interest debt. Anything above 10% should be priority #1. Allocate as much of your new raise as possible to this.
6. Identify Your Savings
Goal How much money do you need to cover 6 months of expenses? That’s your first savings goal. Allocate a portion of your raise to that bucket. Increase it once you pay off your debts.
7. Save For Retirement
How much do you currently allocate to retirement? Use your new raise to maximize any employer match you have. At a minimum, start contributing to a retirement fund every month. Increase your allocation every few months until you hit the annual max.
8. Start Investing
After you hit your savings goals, invest your extra cash. Say you have $10k right now and you invest $500 every month for 30 years. In a savings account, that’d be worth ~$191k. In a brokerage account, it’d be worth 1
9. Don’t Forget To Have Fun
Make sure to allocate some guilt-free money. Go shopping, plan a vacation, and Splurge on that thing you’ve been wanting. Having strong financial practices is important. But so is having fun. Don’t forget that :)
10. Refine And Automate
Focus on finite goals first:
- Paying off debt
- Reach your savings goal
After that, automate monthly transfers for:
- Your retirement account
- 2. Your brokerage account
- 3. Do your savings account
If you do that? Your raise will be worth 10x+.
