There’s good news on the compensation front. According to a new survey by Bankrate.com, nearly half of Americans polled said their pay increased over the past year — 37 percent from a pay raise, and about 12 percent from finding a better paying job.
More money is only good — if you make the most of it. If you’re one of the lucky ones, here are some good uses for the extra cash.
- Think long-term
“Before spending your hard-earned raise, reassess your budget. Consider paying down loans or saving more. This may not have an immediate, tangible benefit, but you’ll be in a much better financial position in the future,” says tax accountant Michael Eckstein in Huntington.
- Forget frivolity
“When you think about the best uses for a raise, it ain’t tickets to the Bahamas. If you have high-interest credit card debt, there’s nothing like increasing your monthly payment by the amount of the raise to pay down that debt much faster and save on the interest accruing,” says Stephanie Genkin, a certified financial planner in Brooklyn.
- Prepare for the unexpected
If you don’t have 3-6 months of living expenses readily available to you, build your emergency fund.