Everybody loves to make more money. It doesn't matter if you start to make more money by getting a raise, transferring to a different job or career, or you pick up a side hustle. The point is that we all think we could stand to make more money.
But what really matters isn't just how much money you make, it's what you do with it that matters. The solution to your money problems isn't just to make more money it's to use that money wisely.
Here are 3 things you should consider doing when you start to make more money.
One of the easiest things to do when you start to make more money is to save it. Confused? I know that saving money isn't nearly as easy as it sounds, but if you set up an automatic transfer for every payday equal to the amount of your raise, your side hustle, or the increase you earned by changing careers, you'll have a nice chunk of money saved up in a hurry.
Similarly to the point above, most employers allow you to easily change your retirement withholding at any time by filling out a simple sheet of paper or an online form. This ensures that when you start to make more money it is funneled directly into your retirement account so you don't ever even see it in your paycheck.
This might even be a better option than putting it into your savings account because it's harder to change a form for retirement than to cancel an automatic transfer at your bank. Plus with this option it won't even psychologically seem like you are starting to make more money since your paycheck never changed.
Spend It (Wisely)
There are times when increased spending is ok. When you start to make more money, one option for using that increased cash flow is spending it wisely on things you've been putting off in your regular budget. For example, you might need to do some big home maintenance, repairs, or even smart upgrades when you start to make more money. I'm not talking about purely cosmetic upgrades, I mean things that will help your home to be more energy-efficient or to cut down on future maintenance and repairs.
Another example would be to spend it on other things you need by have been putting off. Just last month I finally broke down and got new lenses put in my glasses because I could finally justify that extra expense now that I make more money. Before that I would only get new lenses in my glasses every few years to cut down on costs. (Don't worry, I did still update my contact prescription every year.)
The main point that just starting to make more money isn't enough to make a change in your life or your budget unless you use that money wisely. By saving it, investing it, or spending it wisely, you'll begin to get ahead financially, which is the whole point of wanting to make more money to begin with.
How do you use extra cash flow whenever you start to make more money?