If you get a raise at work, it’s going to feel good and provide you with more money to spend. Don’t fall into the trap of spending exactly what you earn as this will make it nearly impossible to save any money for the future. To help ensure that you don’t subconsciously adjust your spending to meet your earnings, you may want to continue to follow these money-saving tips:
Do Your Grocery Shopping With a List
It can be easy to get carried away at your local grocery store if you don’t have a plan put in place. The executives in the food industry spend billions of dollars on advertising and have their items placed in key positions when you go shopping to entice you. You can resist spending any extra money when you’re bombarded with compelling displays or colorful packaging by creating a shopping list and sticking to it.
Keep Money on Your Mind by Using Cash More
If you’ve got a credit card or a bank card tied to your checking account, it can seem like you’re not actually spending money when you purchase items. Change this habit by going to a system where you only use cash. Subconsciously, this can make you more aware of how much you’re spending so that you don’t end up buying frivolous items you don’t need.
Don’t Upgrade Subscriptions
If you’re making extra money due to a raise and want to spend it on a few extras such as a gym membership or cable TV, be sure to negotiate your membership or subscription price, especially if you have been a loyal patron of the company. You’ll often be able to get a discount of five percent or more, which can add up over time.
Record Your Spending
Understanding where your money goes each month is a key way to understand how much you spend. You’ll see the items or services you’re paying for and can decide if they are really necessary. This can be done easily with software available online, or you can create a spreadsheet, which lists all of your expenses. By doing this, it will also give you the data you need to create a budget.
Create and Use a Budget
Once you know how much you’re spending each month on items and services and you know how much more you’re making each month you can create an adjusted budget. Analyze all of the categories related to unnecessary, unessential items or services and determine if you really require them in your life. Be sure to add a category for savings and make it a necessary expense each month.
One of the pitfalls you can face when increasing spending when you get a raise is not being prepared when life throws something unexpected your way. Dealing with emergencies can be less stressful when you have enough money saved to help get you through those emergencies. If you don’t have enough money saved, it’s important to be aware of alternatives should you encounter an unexpected emergency, like a trip to the hospital and resulting medical bills. There are financial solutions tailored to this type of unexpected scenario such as home equity loans, or short term loans online if you don’t have equity to borrow against. However, when you have more money in your paycheck each month you should prioritize stashing a little extra away for life’s unexpected emergencies.
Eat Out Less
When you eat out, it can cost you a great deal of money. By cooking your meals, you can save money and probably even eat healthier if you’ve been spending too much time at fast-food restaurants. By cutting down the times you go out to eat to maybe once or twice a week with family or friends, you’ll have more money in your budget to save and may even enjoy the times you eat out even more as it won’t be a regular occurrence.
Pay Off Your Credit Card Each Month
Credit cards can be a convenient way to pay for bills. They offer an easy way to visualize where you have been spending your money each month and can also offer cashback rewards or give you the ability to earn free flights. While these aspects are positive, don’t fall into the trap of not paying them off each month.
Embrace Financial Freedom
When you’re making more after receiving a raise, you’ll still need to have a specific mindset, which has you examine your expenses to evaluate if you actually need them in your life or not. To achieve financial freedom, it’s necessary to have control and watch your spending habits. Live comfortably and only splurge on a few items or services you enjoy.