{"id":2054,"date":"2016-05-04T00:15:38","date_gmt":"2016-05-04T08:15:38","guid":{"rendered":"http:\/\/www.cultofmoney.com\/?p=2054"},"modified":"2016-05-03T06:38:49","modified_gmt":"2016-05-03T14:38:49","slug":"what-to-do-when-your-income-increases","status":"publish","type":"post","link":"https:\/\/www.cultofmoney.com\/what-to-do-when-your-income-increases\/","title":{"rendered":"What to Do When Your Income Increases"},"content":{"rendered":"

\"It\u2019sIncreasing your income whether from a promotion, raise, side hustle or business is an amazing feeling. It\u2019s hard to deny that having more money to work with on a monthly basis doesn\u2019t feel a bit freeing \u2013 especially if you\u2019ve been struggling.<\/a> However, if you\u2019re not careful that income increase can lead to some big budget imbalances.<\/p>\n

If you\u2019re lucky enough to find yourself with an income larger than you\u2019re used to, here\u2019s what to do.<\/p>\n

Rethink Your Financial Goals<\/h2>\n

As my income has increased over the years I\u2019ve had to rethink my financial goals several times. I ultimately came to the decision that while my income is up I\u2019ll allocate more toward paying off my mortgage.<\/p>\n

This is currently my only debt and I know that if the mortgage was paid off either myself or my husband losing a job wouldn\u2019t be a burden for us. (It wouldn\u2019t be fun. But it wouldn\u2019t wreck us either.) By focusing on this goal I\u2019m setting myself up for financial success in the future.<\/p>\n

We do still save for retirement, our kid\u2019s college savings and emergencies but most extra money goes toward the mortgage.<\/p>\n

I want to encourage you to adopt a similar train of thinking. Paying off your mortgage might not be the goal for you but what things can you focus on that will improve your financial situation and set you up for success if something unexpected happened down the line?<\/p>\n

Paying off debt, establishing a decent savings rate and saving for retirement are always good options. (Although these definitely are not your only options. Do what feels best for you.)<\/p>\n

Allocate Extra Funds Accordingly<\/h2>\n

Once you have those goals thought out pull out a sheet of paper and jot down a plan. Decide exactly how much money you want to go toward your financial goals.<\/p>\n

(Hint: It doesn\u2019t have to be ALL of your extra income.)<\/p>\n

If you normally stick with a rigid written budget then rewrite your budget with that extra income included. If you\u2019re like me and prefer to automate<\/a> and abide by a loose budget then go ahead and set up your automatic withdrawals to reach your financial goals.<\/p>\n

Is It Okay to Spend More Money?<\/h2>\n

Absolutely! There\u2019s a time and place for frugality but if you\u2019ve found yourself with more wiggle room in your budget and you\u2019re still meeting all of your financial goals and obligations there\u2019s no reason not to spend a little money on yourself. (Unless you hate spending money, which is cool too.)<\/p>\n

In the personal finance world it\u2019s easy to feel guilty about spending money on the things you want rather than only the things that are essential. But a big part of being balanced is spending on the things that bring joy to your life.<\/p>\n

While you shouldn\u2019t go crazy and spend every last dime of your extra income on wants, it\u2019s definitely okay to budget a certain percentage of your income to spend guilt-free on whatever your heart desires.<\/p>\n

Keep it in Balance<\/h2>\n

If you\u2019ve been good at managing your money before your income increase then there\u2019s a high probability you\u2019ll do just as well managing what you have now.<\/p>\n

The best thing you can do is spend the money in accordance to your own personal priorities. If you have big goals you want to hit there\u2019s nothing wrong with funneling all that money toward those goals. Likewise, if you\u2019re ready to spend some of your hard earned money on things that bring you joy then that\u2019s okay too.<\/p>\n

Keep your priorities straight and managing your increase won\u2019t be hard at all.<\/p>\n","protected":false},"excerpt":{"rendered":"

Increasing your income whether from a promotion, raise, side hustle or business is an amazing feeling. It\u2019s hard to deny that having more money to work with on a monthly basis doesn\u2019t feel a bit freeing \u2013 especially if you\u2019ve been struggling. However, if you\u2019re not careful that income increase can lead to some big […]<\/p>\n","protected":false},"author":4,"featured_media":2055,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1,11],"tags":[564,565],"acf":[],"_links":{"self":[{"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/posts\/2054"}],"collection":[{"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/comments?post=2054"}],"version-history":[{"count":0,"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/posts\/2054\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/media\/2055"}],"wp:attachment":[{"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/media?parent=2054"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/categories?post=2054"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/tags?post=2054"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}