I recently met with my employer to discuss doubling my salary. I don’t have any news yet, but I got approval from my boss and her boss to take my case before the board who manages the money. Ironically, the following weeks still held a pleasant surprise for the Budget for Health household. My husband came home with a bonus and then this week, a raise! His company has been bringing in solid profits for the past few years and in return they give the employees a sizeable bonus. My husband’s salary was then increased by 3.9% to accommodate inflation. What did we do with this extra income? If you’ve been following me on Derek’s site or Budget for Health for any amount of time, you probably guessed right: it’s all going toward our savings for buying a home!
Our splurge moment
We just bought a new TV a couple weeks ago with the money we got from Christmas. After that expense, we didn’t want to splurge on anything else. We’re savers by habit (I learned a lot of financial lessons from my parents) and we would rather live simply. This means our “fun” savings most often goes towards doing something rather than having more things.
The bigger the box, the more you have to put in it
This saying works the other way around as well. If we keep accumulating stuff, we’ll need a bigger place to fit all of it! I know we’re young and things may change when kids come in the picture, but right now we are in a position to fit all of our belongings in a moving truck. Aside from packing, it took us a total of 3 hours to move to our current apartment. One hour to load, one hour to drive to our new home, and one hour to unload. It was wonderful!
Planning for budget cuts
When my husband and I decide to start a family, the plan is for me to bump down to part time at the most. If we raised our standard of living now, it would make life a little harder down the road when we’re forced to make cuts and re-learn to live on less (with more mouths to feed!). What we live on right now is a portion of my husband’s salary. Everything I make and the rest of his salary goes toward some sort of savings. We don’t act broke, but we’re only 2-3 years out of college and still have that very frugal mindset. We’re not rich, but we’re able to live richly with what we have.
How would you manage an increased salary? Would you change your standard of living?
If you want more great reading on finances, be sure to check out my recent articles from Women’s Money Week. Topics include (and are directed toward both genders):
Increasing Income- “My Recipe for Increasing Income”
Finding Time/Increasing Productivity- “How to manage 1440 minutes”
Family and Money- “Leave the Light on, Pay a Quarter”
Future planning & Financial Planning- “Everyone has a plan until they get punched in the face”
This has been a guest post from Jessica. She is a Registered Dietitian and shares practical, useful tips on food, fitness, and finance. Be sure to subscribe to her blog, Budget For Health.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.