BUDGETINGLIFESTYLE & TRAVEL

More Money? New Budget!

Landing a new job and increasing your earnings is a huge accomplishment. New income brings new opportunities to plan for your future — including your finances. It’s important to understand that when your income increases, your budget and financial decisions should be adjusted accordingly too. Here are a few things to consider when managing your funds.

Review Your Budget

As your income situation changes, so should your budget. It’s ideal to review what your current expenses are to see if there are any adjustments that need to be made. An increase in your income is a great opportunity for you to increase the amount you put into your savings. Making your savings an expense is a great way to guarantee you’re setting aside money for your financial goals regularly.

Lifestyle Management

It can be difficult to keep your spending in check when you see a larger amount going into your account every pay day. It’s common for the average person to start spending more due to bringing in more income. Just because you know you have more funds doesn’t mean you have to dial up your spending. While you may not have to limit your spending as you had previously, you can get the things you desire as long as there’s a plan behind it.

Adjust Retirement Contributions

Some people may not know what to do with an increase in their income. Increasing your contribution to your retirement accounts is a great way to invest in your future and maintain the same budgeting system you currently use. If you don’t contribute to a retirement account yet, this could be a good time to establish one. Reach out to your employer to see what options they offer or speak to a representative at your financial institution to see what IRA options are available.

Lasting Tips

• Focus on high interest debt. Use the difference between your past and current income to pay down higher-interest debts.
• Open a certificate of deposit. Consider opening a CD to earn more with your additional funds.
• Create a financial plan. Establish a one- or two-year plan including what savings goals you would like to achieve and how you can work toward them by maximizing your new income.