What To Do If You Get A Pay Rise?
Firstly if you’re reading this post because you got a pay rise then congrats! Pay rises can be tough as the ones you tend to get without asking are not even worth talking about. And asking for a pay rise can be a toughie, especially for us ladies. You have to sell why you think you deserve more money, and sometimes the conversations can be awkward. I have been pushing for one at my work which has been ongoing for about 9 months now. Crazy or what?! Hopefully, it will be worth it in the end.
When you do get a pay rise and more money coming in each month it is great, but we always up spending whatever we have. So if your pay goes up by £200 a month, over a few months you’ll find your general spending goes up by £200 so you don’t feel any better off than you did before. Then will come the questioning of how you ever coped beforehand?! I’m sure it’s all happened to us before. On month one you feel amazing with all this extra money. Then you get used to it and bam it doesn’t feel like extra money anymore. But here’s how you should plan your money if you do get a pay rise so you feel it.
What to do with the extra money if you get a pay rise?
I like to operate on a 50/50 ratio basis when it comes to a pay rise. From looking at your old vs new wage pay slips work out how much extra money you’ll see in your account per month.
On payday transfer 50% of that extra money straight into a savings account. You won’t miss it as you never had it to begin with, but over time your savings will add up. You can choose to add this extra money to savings you’re already doing, and just upping your monthly contributions. Or you may choose to put it aside separately. But over time you’ll see this build up and you can use it on whatever. Maybe this is your new holiday money. Maybe you’re putting it aside to be prepared for Christmas (if so I salute you!) Or maybe you’re just putting it aside to treat yourself to something nice.
Then with the other 50% of the increase, you can keep this to spend alongside your normal monthly money. This means you’ll feel the benefit of the pay rise straight away. But you won’t just waste all the extra money on more clothes, or more meals out. You earned the pay rise so you should benefit from it in some way.
Of course, if your pay rise is quite a lot you may choose to put a large amount in savings. But work out what feels best to you.
What to do with the extra money if it’s a one off bonus?
You may not find that you get a pay rise, but in many companies, you can get a yearly bonus. This can depend on a number of things including company and personal performance. But for some people, this can be quite a lot of money.
With a bonus, I like to operate on a 75/25 rule. Whereby 75% of your bonus goes straight into savings. It might be adding it into your existing savings or putting it in a little pot aside so when you decide to re-decorate a room at home, buy a new kitchen appliance or go on a special holiday you have money put aside. And then you’ll have something tangible to show for your bonus.
Then 25% of your bonus should be yours to treat yourself. As it’s not regular money you’ll get it’s a chance to give yourself a pat on the back. Of course, how much you get as your bonus will depend on whether your treat is a meal out with a cocktail or a designer handbag. But either way, it’s a treat to say well done for working hard! You deserve it!
Have you ever had a pay rise?
21 responses to “What To Do If You Get A Pay Rise?”
Leave a Reply
All About Me
Rhian Westbury
Travels and Destinations
Nothing currently planned
I have never had a bonus or pay rise. So never really thought about what to do with the money. I am generally to sensible with my money though and don’t end up treating myself.
I like the idea of putting half away every month. It stops from spending the whole amount.
Yeah and stops you becoming permanently used to having the money x
I’ve never had a pay rise. I’ve had a couple of bonuses over the years though which I put into savings.
I agree with putting some of the money away. It can help with bulk payments of bills and also if something comes up that you don’t expect that needs fixing in the home. I do like to be sensible.
I love the idea of thinking of it in a 50/50 split. Saving half and then enjoying the other half. A good way to ensure that you are adding to your savings whilst still getting to enjoy your pay rise
Setting up a direct debit to save on pay day is such a useful tip. I do this myself to make sure I always have a buffer of savings for rainy days/devastating storms!
C x
I like your thinking here. transferring 50% into savings is deffo a good idea and a great way to start the savings pot xx
Exactly, especially if you’ve struggled creating a savings pot before the pay rise x
Transferring some over is such a great idea . I’d probably end up blowing it all on treats and then regretting it afterwards:)
Me too! Like yes buying stuff is always fun, but saving it means you can do something big x
I think saving some of it is definitely important as you’ve not been used to getting it anyway. I was a support worker though so getting a pay rise never happened unless minimum wage went up and that was still barely enough to cover costs
You’re so good with your money. When I get a payrise I normally treat myself to something, feel lucky and then it gets absorbed into normal living costs. Mich x
That’s the problem when it gets absorbed into normal living costs x
I love the idea of the 50/50 rule as well as the 75/25 rule, I have to try and do both in the new year as we get our annual bonus and early pay rise.
Ohh congrats, I’ve never had a bonus in a job, but I’m holding out one day x
Great advice, we do this. All extra goes into a pot for our travels, of which we have our next trip coming up soon. Its well needed and I cant wait!
That’s a nice thing to do as you know you’re spending it on something special x
I think its always good to put some money aside, but it would be nice to spend a little more on treating ourselves but we always seem to have something more important we need to pay!
It’s always good ro have some savings behind you for emergencies. They say 3 months of wages don’t they? I have a small amount of savings like this but I must admit I then spend it on holidays. I have a couple of pensions so I don’t worry too much long term and husband has an investment. I think as you get older you will work for longer as well and i can’t see me retiring at 65!
You’re so right, retiring feels like such a long time away for me at the moment haha x