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It's always a good feeling to get a raise, so if you've been privy to one recently, take this time to pat yourself on the back. It's well-deserved, sis. But after the pat, take a deep breath and pause on getting that new car or taking that luxury vacation you've had on your vision board since the sixth month of the pandemic lockdown.


It's definitely not a game of deprivation to simply take a beat and plan to truly leverage that boost of income to its full advantage. If you were among those who got part of the expected 4.6% pay increase this year, consider a few tips on the smart way to handle getting a raise:

1. Invest the salary difference to make that money grow.

If you've already budgeted to use what's now become extra income for at least one dream purchase, why not take part of that and invest more in the stock market or other investments? This is a great way for your money to grow in the long run and for you to see the long-term benefits of the raise. You can ask your employer or financial services advisor to simply up the percentage (or amount) allotted from your paycheck for certain investments such as your 401k or Roth IRA.

For example, if your yearly salary is $45,000 and you've been given a raise that boosts it to $48,000, take that $3,000 (or at least part of it) and invest it in stocks. If stocks aren't your thing, consider real estate (REITs), art, or equity crowdfunding where you can invest in a startup you're passionate about seeing succeed. If those options are still not quite your thing, invest in yourself or your children's educational or career future. Start a college fund, pursue a certification, get a peer--coaching membership, join a professional networking group, upgrade your professional website, or start a side hustle with those funds.

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2. Go ahead and pay down that debt.

If you've been on track with paying off credit cards, student loans, or other debt, you can also use the difference to pay down debt more quickly. When favorable, pay more on your balances, especially for student loans. This is an opportunity to put more than a dent in the interest. Reconfigure your budget to find out how you can pay a bit more per month in order to celebrate a bit earlier when it's time to say goodbye to those automatic payments and hello to financial freedom.

If you are living check to check, behind on paying credit card bills or loan payments, or just downright ignored loan repayments for whatever reason, now's a good time to start paying down the debt before creating more problems in the future. Get that free credit report, contact your creditors, and find ways to at least be able to get into the practice of getting rid of the elephant in the room.

3. Reward yourself whether big or small.

As much as we all should be responsible and cover our financial obligations, spending money from a raise should also be enjoyable. Once you've taken a second look at your budget and consider your investment options in order to stretch your raise even further, practice mindfulness and treat yourself, sis.

Consider what a reward looks like for you. Is it play (i.e. a trip, concert, or bi-monthly luxury dinners)? Is it something that benefits your whole family (i.e. getting a kitchen upgrade, trading in your old car for a new one, or booking that Disney cruise)? Is it something on the smaller scale (i.e. going to the spa, trying out that robotic vacuum you have on your Amazon wish list, or getting a mani-pedi combo after years of neglecting those fingers and toes)?

Whatever that reward looks like, incorporate it into your new spending plan and enjoy. You've worked hard and you should reap the fun benefits as well.

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