In the current economy, getting a raise is a rare occurrance. Many bosses would say something to the effect of "be happy you have a job." While many people are working on their budgets and trying to find a way to cover their bills from either lost income or increased costs, others are having to endure a problem that can be even bigger: getting a raise. How can be scoring more dough be a bad thing? Obviously, it's not, but spending problems can quickly mount up if one isn't careful.
To put this in perspective, imagine getting a sudden increase of income to the tune of $50 a week. Awesome! Congratulations! Whether it be a contractual increase or a pat-on-the-back from the bosses, you feel excited and invigorated every time your stare at the extra ching on that paycheck. Now what? It's time to celebrate, right? You might take your family out to dinner or go on that special night out when that special someone. Sounds great! But, what if you feel like you deserve something more as a reward. How about that Harley you've been looking at. Come on, you deserve it...sign the papers... Next thing you know, in your excitement, you've signed a note for the bike that holds you responsible for $300 in monthly payments, justifying it to yourself as deserving and figuring to yourself that you can find out where the difference in the cash will come from later. It's problems like this that get so many people into more financial burdens rather than financial blessings. Now, that $200-a-month increase in pay comes back as a loss of $100 monthly to cover the cost of the new set of wheels.
So, what should you do if you get a raise?
First, look at your budget before anything else. Are there places on your budget sheet that could benefit from the extra $50 a week? Are you tithing properly every week? Are you shortchanging your retirement portfolio? Will you be prepared for the winter season if fuel oil, natural gas or propane goes up?
If the budget seems like it's set up properly, then it's time to decide on what is needed and what is wanted before you leave the house. That Harley might look good and smell good, but if the payment will gobble up more than your raise, it's definitely a raw deal. Certainly you want to have fun once in a while, but being on the hook for several years can lose it's luster quickly. Besides, could this money be used for a more practical purchase?
Be very careful and be sure that the raise is permanent. Ask yourself if this raise could be dropped a year from now. If your raise isn't a raise at all, but just an increase in pay based on commissions, you'd be better off to hold off on any purchases since your income can fluxtuate dramatically from one week to another.
Sometimes the best thing to do when a blessing comes your way is to step back and evaluate your new found wealth before you take that leap into something that may not be what you expect.
- Drew Kuespert
