Don't Spend Your Raise - Save It!

Build Your Savings

Receiving a pay increase – or landing a better-paying job – is certainly exciting, but don't immediately spend your "windfall." Consider putting the "extra" money towards savings or paying off debt.

Say your pay has increased by $100 per month. If you don't have an emergency fund, consider setting that $100 aside for the next six months to create a small emergency fund. Or you could choose to put the additional $100 towards paying off a credit card or other loan.

Here's the key: If before you received the pay increase you were able to live within your means, keeping your spending at the same level frees up the additional cash for investing, for paying off debt, or for making a purchase that you otherwise would have financed. If you do nothing else, consider immediately increasing the percentage of your pay that goes into your 401(k) account; when the money is automatically deducted from your pay you can't miss what you never "had."

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The information provided is not intended to be legal, tax, or financial advice or recommendations for any specific individual, business, or circumstance. TowneBank cannot guarantee that it is accurate, up to date, or appropriate for your situation. Financial calculators are provided for illustrative purposes only. You are encouraged to consult with a qualified attorney or financial advisor to understand how the law applies to your particular circumstances or for financial information specific to your personal or business situation.