What to Do With a Raise

April 15, 2010 in Saving

Happy Tax Day!  I did my taxes last month, but I’m glad that April 15th  is here because I got a cost of living increase today.  While not a windfall, I’m very excited to get some extra money in my paycheck each month.  Now to figure out what to do with it. 

Increase My Standard of Living

I enjoy being thrifty, but it would be nice to get some new clothes and shoes, splurge on a vacation, or even get cable.  I need to get a new laptop soon and think the extra money would be well spent on one.

 Save it All

I could add the entire increase to my Roth IRA to help me meet the maximum contribution.  I feel like I’m fairly comfortable with my lifestyle and that I don’t need the extra money for any necessities.

 My Choice: Spend Some.  Save Most of It.

The most financially prudent thing to do would be to save the entire increase, but I’ve decided to splurge a little. I’m using the first month’s increase in pay to buy new shoes.  I feel like I’ve worked hard and deserve to buy something that I want to reward myself.  The rest will be split between my Roth IRA and an ING savings account.  I’ll increase my monthly contribution to each account automatically, so I won’t be tempted to spend the extra money on something else.

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{ 2 comments… read them below or add one }

Geneva April 15, 2010 at 5:21 pm

Yes! It is so tempting to splurge. But I am also a HUGE fan of my ING account. The money goes away automatically so I don’t have to worry about it. And every now and then I check in to see how much the savings are adding up!

Thanks for the tips!

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single&saving April 15, 2010 at 5:28 pm

It’s a huge temptation. Geneva, you’re the one who inspired me to open my first ING account! I’m pretty sure I used your referral bonus to get $25 when I opened it :) Thanks for reading!

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