Getting a Raise? Put it to Work
June Walbert, a Certified Financial Planner practitioner with USAA, says when you know extra money is coming, it's good to have a plan.
A change in income is a good reason to review your budget and financial goals. If you don't have debt, if you have an emergency fund to cover six months of expenses and you've fully funding your retirement account, then prioritize what you want to do with your finances next.Whatever you do, don't jump to spend the new cash coming in. Put it in a safe place like a savings account, money market fund or certificate of deposit. Postpone major purchases until you've had time to really understand what the extra money can do for you.
If you weren't making ends meet in 2010, and relied on credit cards or loans to get by from month to month, strongly consider paying down this debt with your raise. This will get you one step closer to financial peace. Plus, you could save hundreds in interest in just a year's time.
-- Courtesy of USAA