I received my pay rise letter late last week, and I'll be getting a 6.5% raise starting the 15th July, which is a healthy increase considering the current economic environment.
Since July 2007, my salary has increased by 21%, not too shabby! I went after and got a promotion last October which really helped that number along, but I've done well in that new role and have been rewarded accordingly, if I do say so myself.
I spent the weekend (no, not the whole weekend – what do you think I'm like?) tossing around what I should do with it against what I really want to do with it. I’m happy with the compromise I've decided.
One of the easiest ways to pay down your debts or save for your goals effectively is to not increase your lifestyle along with any salary increases you receive.
This makes for a substantial snowflake to add to your goals each month.
I did this when I started in my new role back in November last year (having already started paying down debts by then thank goodness), and will do this again in a modified way with this new increase.
I'm really looking forward to using 50% of the extra income to increase my debt repayment efforts, and will allocate the other 50% to the 40th Birthday UK Tour Fund.
I'm comfortable with how my lifestyle is these days, with a healthy focus on debt elimination, while planning for upcoming expenses, and still having something left over to enjoy my life along the way.
I have nothing but admiration for those who have a single minded, do without all 'wants', nothing until the debts are gone, 'gazelle like' intensity to eliminate their debts, but I know myself well enough to understand I need to find a level that would address everything I want, including paying off all my debts.
Just like the name of this blog, paying down debt is like a diet. If you go too extreme for you (what extreme constitutes is entirely subjective of course), you’ll end up 'bingeing'. In my case on unnecessary items, like trashy novels, unplanned trips to Ikea and takeaways every night.
Or maybe that’s just me.
Are there things you've kept in your budget that others might not consider necessary?
I'd love to know what you budget for that's may seem frivolous to another, or are you extremely focussed and have cut out all 'wants' until you’re debt free, I'd love to hear about that too.
congrats on the payrise and I love the idea of saving for the UK trip! I think having Pay TV would be considered a luxury, but my family has been so good I decided to compromise so I didn't risk a revolt and I'm not sorry that I did.
ReplyDeleteOh absolutely! My Netflix subscription comes to mind immediately. Also, I have a friend 2.5 hours away that I still plan on driving to see. I probably could also slim down my cell phone as well, though I am on a contract right now. I feel the same way you do though - to give up everything would just make me feel depressed. I need a balance.
ReplyDeleteThank you for your lovely comment and welcome on my blog :)
ReplyDeleteI've been thinking about this very thing, mine is really in regards to Christmas. I love that time of year, it is special to me. I was feeling worried about how the expense of it was going to affect my new way of life :)
With great advice from other bloggers I've decided to celebrate Christmas as I've always done the difference being it'll be saved for in advance - no more Christmas on Credit! I initially thought that that extra money would reduce my cc debt faster but for me there really is no compromise for Christmas. Yay for balance.
C xxx
6.5% is great dd.. good choice to split the money :)
ReplyDeleteAwesome that you are utilizing half of your raise to pay down you debt. Once that is done should you 'pay' that amount into savings?
ReplyDeleteA 21% pay raise in one year is amazing! I don't know of anyone that has managed that. Brilliant! Do you have any plans for the new earnings? Any personal splurges on something fun?
ReplyDeleteMaybe you can write e book of your experience ;)
ReplyDelete21% is impressive! When I received a big raise, I moved into a one bedroom apartment and swore off roommates...quite a lifestyle inflation!
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I agree all or nothing doesn't work for everybody and certainly not for me! I have to temper very good weeks with some very `naughty' ones. Or what others might consider naughty anyway!
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