Making the Most of a Pay Rise

Whatever amount of money you are currently earning, the chances are you wouldn’t say no to more. Any additional amount of income can make life easier and more enjoyable, as you can spend it on those things that you’ve had your eye on for a while and always wanted to buy.

But before you get your plastic out, it pays to stop and give some real thought to that extra amount of money you will be getting from now on. Depending on how much more you will receive in your weekly or monthly pay packet, you could be making a much better decision on what to do with it than simply frittering it away each time.

That’s a real problem with receiving any extra amount of money – most people live to their means, or perhaps even beyond them. If you receive a salary of £20,000 for example, you will live to that amount. If you were to get a pay rise of £5000 a year, you would think that you could continue to live as you do, and save a healthy £5000 a year instead of spending it. But it’s much harder to do than you might think. Many people find they gradually start to spend more – often without even realising it – until they are once again living exactly to the amount their job pays them.

This is why you should sit down and carefully evaluate your financial situation before doing anything else. Consider how much more you will receive in each pay packet, and think about what good uses you could put that to. Receiving any kind of pay rise can enable you to get further out of debt if you have bills to pay off.

If you have a debt consolidation loan you could allocate the money to cover your monthly payments, for example. Alternatively you could take this as an opportunity to consolidate your existing debt and use your pay rise to help meet the monthly payment.

It doesn’t sound like a very fun way to spend your pay rise, but it is actually the most positive thing you can do with it. The peace of mind that comes with taking a pro-active stance will last far longer than buying a meal or a new computer game, or whatever else takes your fancy.

Of course it’s never a bad time to sit down and take a long look at your finances. Even if you don’t have a pay rise in the offing, taking a closer look at how you spend your current wages can help you to leave more money in the bank at the end of each month anyway - all of which makes any pay rise you get in the future even more good news.