Summary
A small raise, or a new job with a better salary, can make a huge difference in how you think about money. Keep the following information in mind, when you start making more money.
When you’re accustomed to living paycheck to paycheck, a small raise or a new job with a better salary can make a huge difference in how you think about money. You may not be ready to buy that new Lexus quite yet, but it is wise to take stock of your situation and what this change in finances means in terms of your general spending habits and financial goals.
Treat yourself to something nice – you deserve it! Then take a moment to think through the implications of your new income bracket. Maybe things will remain more or less the same, only with less money worries hanging over your head at the end of the month. But chances are, your recent wage hike could translate to a whole range of differences that might add up to more positive financial prospects.
Adjust Your Budget to Reflect Your New Financial Reality
Over a third of workers live paycheck to paycheck, according to BankRate. That means a lot of people are moving in and out of that category every day. Even if you haven’t quite achieved that goal yourself, start thinking about financial habits you might change when you do.
One of the first things you will want to do is review your household budget with an initial focus on how much money is coming in and going out on a weekly, monthly, or yearly basis. Let’s say you will be making an additional $1,000 each month. You will need to figure out how to divvy up where that extra cash should go. You don’t have to have all the answers, but you can start by prioritizing which expenses should be paid off first and which can wait.
Determine the Payment Ratio that Leaves You with the Lowest Financial Penalties
Once you’re ready to take a closer look, you may decide to partially pay off a few different expenses rather go all in on one area. If you have $200 left over and owe $150 to a credit card and the same amount in educational expenses or money you borrowed from a relative, then you have to make a decision.
The expense that should be paid immediately is usually the one that stands to accrue the most in interest and late fees. If multiple bills do, then you’ll need to calculate what penalty you will be facing if each one is partially paid. Taking a few minutes to do the math will reveal the smartest and most cost-effective way of using your remaining funds.
Consider an Online Interest-Earning Savings Account
Traditional savings accounts no longer bring in the interest they used to, and online accounts are looking better to a lot of folks these days. Better to accrue some interest rather than stash your cash under a mattress. If you’re looking for places to store your savings, check out some of the different interest rates recently available per Business Insider. Plus, many Prepaid Debit Accounts now offer free savings accounts. Yes! Debit, found exclusively through CFSC Community Financial Service Centers, is currently offering 6% interest on your savings, which adds up. You still have access to your savings whenever you need, but at least it is working for you – with added interest!
It’s Ok to Splurge – Just Don’t Overdo It and Create More Debt Problems
You deserve to celebrate every success you attain! Rather than being a bit too spontaneous – say, inviting all your work friends out for dinner and drinks – determine beforehand how much money should realistically be spent on the celebration. Everyone deserves to splurge a little and recognize their achievements in life, big and small. When you focus on the sentiment of the moment rather than showing off your money, the memory will leave a sweeter taste in your mouth.
Spend Wisely and Safely at Your Local CFSC Currency Exchange
Now that your cash flow is a little more robust, take a look at all the different ways that Currency Exchanges help you manage your finances and stay out of the red. The folks at your local CFSC Currency Exchange will be happy to help you find smarter ways to spend money safely, pay your bills and take care of other routine tasks. For example, cashing your check without waiting for it to clear can help you pay your bills on time and avoid late fees. You can also get money orders and send money to loved ones all in the same visit.
Visit CFSC Currency Exchanges online or stop by the closest CFSC location today!