Treat yourself with a $5000 raise this year!

13 Jul 2020

Are you due for a salary hike in the range of $5000 this year? Congrats!

Several thoughts must have crossed your mind as to what to do with this extra money, right? Yes, it happens to all of us. You may see endless possibilities to use this extra bit of money, right from treating yourself to a nice vacation, using a part of it as a down payment to buy some property or to pay off some outstanding debts.

But, we will advise you to exercise a little restraint and do some smart planning so that this extra bit of money gets utilized in a more meaningful and effective manner. Just come to think of it- even if you are getting a hike of $5000 in salary, your effective hike will be around $4000 only (assuming you pay about 20% in taxes every year). This means you are earning just over $300 extra on a given month. But, how can you realize the full benefit of your $5000 hike, even after paying off your taxes and other unavoidable expenses? The answer is- with a little bit of planning!

We will tell you how!

Here are some ways to ensure more meaningful use of your excess money-

  1. Put the excess money into an emergency fund

Regardless of who you are, you can't avoid unexpected or unwanted expenses. Having an adequate emergency fund may save you significant time from such sudden fund crunches later on. Therefore, it's always a good idea to set aside a certain amount of money from your monthly earnings, and it's nothing better to start sooner than later, especially when you get your well-deserved salary hike of $5000.

  1. Realize the power of ‘smart’ savings

No, we are not talking about saving in bank accounts. Instead, you can find out enough avenues in your day-to-day routine to save money from.

You would do well to curb your natural ‘spending instincts’. Do not ‘overcommit' to make unnecessary spending, just because you got a rise of $5000 this year. Apply a bit of thought and caution and you will be pleasantly surprised to find out the amount of money you have been able to save from your budget.

  1. Resist the temptation to buy branded/advertised products

 With a little bit of search, you will find out that cheaper substitutes are available which will help you to save quite a bit of money over a period of time.  Even if you are hell-bent on buying branded items only, you can visit discount stores to avail them at a much lower price.

  1. Drive Less

Make an effort to drive less so that you can save enough on gas. You may even try carpooling a couple of times every week. This way, you can avoid piling up additional miles.

  1. Reused Items

Another excellent way to save money is to buy moderately used items. You can visit thrift shops to get quality clothing options in this category. Online platforms like eBay or Craigslist will link you to sellers who want to dispose of sparingly used electronics or furniture items. This way, you can get things you need at incredibly lower prices.

Convert ways as mentioned earlier into your habits and see the difference they make into your financial life. You will feel like treating yourself with a $5000 raise and beyond, this year!