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You Just Got a Job Giving You a Big Raise, What’s Your First Move?
I hope you said “nothing”. Hear me out.
Regardless of if you have been living paycheck to paycheck for the past few years or have been okay everyone should have the same plan.
I’m working with someone who just got a $20,000 raise. They said the first thing that came to mind was “I’m rich”. I could understand why they would feel that way. They have been living paycheck to paycheck for the past few years. They are a single parent who can’t depend on consistent support from their child’s other parent. Their rent also recently went up $400 so this couldn’t come at a better time.
As their financial coach, I told them to not make any sudden moves. I suggested that for now they wait and see how much their first two checks are. I want them to see how much their income is truly going to increase. This is crucial since they don’t know if they will be paying into a pension or how much they will have to contribute toward their health insurance. They also don’t know if there is a retirement plan in place.
With the uncertainty of the world, I also suggested waiting until they passed probation before making any big moves.
Even if there is no probation period, keep living on your old income for at least the first two months.
