Tuesday, January 17, 2006

Pay Raise Does Not Mean Expense Raise

How often do we all make this mistake? Firstly, we have a nice cute little 900 dollar salary that we complain about being too small to survive on BUT we DO survive with it month after month. We devise ways to purchase cheap foods and have cheap social activities etc and manage to be quite comfortable. BUT suddenly, our boss grants us a well deserved pay raise and we suddenly see things differently. We suddenly realise how much more "stuff" we NEED to get since we can now "afford" more of them. Do you know what this is called? It's called CONSUMERISM and that's what has the world broke. We always make certain that we make everyone else richer and richer while we go "broker" and "broker" each day. STOP IT.
A pay raise should be handled more maturely. That extra cash on your paycheck means a lot more than going to the movies twice per week instead of once. It's an opportunity for financial growth. If you're not a risk taker who may buy stocks etc, then you can just save the extra 200 or 300 dollars in the bank...
One thing that I have mastered is to have an unchanging monthly budget regardless of pay increases. If your current pay allows you to save 100 dollars, then a pay increase of 200 dollars should mean you can now save 250 or 300 dollars.
If you're accustomed to 10 dollar lunches, then be happy with that and maintain it. Try not to let your extra cash disappear via more costly lunches or more trips to the movies than you are happy with. Continue to live life the way things were before you got the raise and you'll see the value in the long term.
If you have one source of income, then relax and employ this practice. If you have alternative sources of income, then employ this practice nonetheless...Either way you succeed in the long term.
We have a saying in the caribbean that goes like this,"one, one does full basket". Simply means that no matter how small a periodic contribution may be, in the long term it's very beneficial. So imagine how much money you would have saved by just tucking away an extra 100 or 200 monthly from your pay raise.
Do you realise how much you can save per month if you do not spend any of your change? Some folks have reported that counting up all of their change in a month, amounting to over 400 dollars. Interesting isn't it.
Try these techniques today. Never mind who may say you're stingy or just plain cheap. You will be in a better position than them in the future if you adapt this practice. IT'S SOMETIMES OK TO BE A MISER.

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