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Ask the Readers: Suggestions For Budgeting With a Pay Raise

Today’s question is from Susie:

My husband just started a new job where he is making $10 an hour more than he was before. A few weeks later, I got a $5 an hour raise at my job! This is awesome, but I’m honestly not sure how to manage this money.

We have a large amount of debt and aren’t really good with budgeting. Do you or your readers have any suggestions as to how to wrap our heads around this — and what best actions to take? How have others handled large raises?

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57 Comments

  • Lyn says:

    congrats on both raises! making more money is certainly a blessing. That being said, I would stick with the budget you have based on your old salaries and place all the extra onto paying off your large debt. Once the debt is paid off then you can revisit you budget needs.

  • Amy says:

    Start by having a conversation about your goals, especially long-term. Get out of debt? Buy a house? Have children? Get a degree? Give to others? Retire early? Then plan financially accordingly.

  • Jenna says:

    Yay for you guys! If it were me, I’d say go out and celebrate the raises with a nice dinner or something… Otherwise, keep your standard of living the same and use all of the extra to pay down debt. And– If you don’t have any savings, set up a separate savings account and make an emergency fund.

  • Denise says:

    We recently had some money free up in our budget too. We decided to put half of the freed up money into savings and half toward bills. Just sharing what we did recently 🙂 Congrats on the raises!!!

    • Jennifer says:

      That is awesome. I think the easiest thing to do would be take your new paycheck and subtract your old paycheck from it and use the difference to pay down debt.

  • Kaycee says:

    That is over $31K a year. Keep your budget the same and send the after tax difference to get rid of that debt!

    • Lisa says:

      Excellent that you put it into the year-long amount! It is so easy to fritter away what seems like a “little bit” of money ($15) But, obviously, when you see the big picture of that number it hits home and makes you think a little more seriously about handling it well!

  • Guest says:

    Create one of those debt-ometers where you mark off each week (or pay period, whatever that is) how much you have paid off. Put it somewhere that your entire family can get excited about it and watch all the progress you’re making!!

    Oh, and create a budget!!

    • Kim says:

      Follow what Dave Ramsey says and you’ll be out of debt and saving like crazy much faster than doing it without a solid plan that really works.

  • Susan says:

    We aren’t really good at budgeting either. I’d suggest RUNNING to your public library and signing out Dave Ramsey’s “The Total Money Makeover” to get you on track with your finances and to help you pay off your debt, especially now that you’ve both received wonderful raises! If you go to daveramsey.com he has his radio show broadcasting 24/7 so you can listen or watch on your computer, and its free! I get so many great ideas catching bits of his show when I prepare meals, etc!

    • Kelly says:

      Keep the budget the same and pay off the debt! Dave Ramsey has an excellent “snowball” system for paying off debt. daveramsey.com

  • deloshc says:

    I couldn’t agree more Crystal. When you receive a payraise, it’s easy to get excited and start spending outside your budget. In this economy you must remember if you are lucky enough to not only be working but be recession thriving then it’s time to Rein in on those debts.
    1. Stick with your old budget, and get your debts paid down first.
    2. Then start putting funds towards Savings -enough for 6 months worth of bills, With layoffs everyday You need to plan for unforseen events.
    3. Contribute to your 401K or retirement funds-This is also a good way to save for the future.
    Remember, It’s just as fruitful to be spend thrifty. Keep up the great work Crystal. Love from Coach DeLosh-at http://www.Smartbirdconsulting.com

    • Laura M. says:

      This is exactly what I was going to say! My husband and I just put a budget together so he can go into business for himself next August, and I flat out told him that I’m ignoring any raises–we’ll stick to our old budget and put the extra toward paying off debt.

      This would be what I did with extra money:

      1. Stick to old budget
      2. Savings!
      3. Max out yearly contribution to IRA and raise 401K contribution.
      4. Start putting aside money for kids eventual college, or if they go to a vocational school, living through their apprenticeship.

      After all that, I’d consider having a vacation fund for a yearly trip. Yeah, it’s boring, but worth it, I think!

  • Challice says:

    Dave Ramesy has a very good budget category, so if you don’t like anything else he is/does, this alone will be worth it to you.

    KUDOS to you for trying to be wise with your finances. I can’t help but think of the 3 men and the given talents parable that Jesus talked about.
    “Well, done good and faithful servant. You have done well with a few things, I will put you in charge of many things.”

    I personally would be paying of the debts (per Dave Ramesy’s snowball debt page) as quickly as I could. Then I would want to pay the mortgage off, all the while maintaining a healthy budget. Don’t cut yourself too short but don’t just “throw the money away” either.
    Look at your spendings for the past 3 months and see what you are spending and where.

  • Melissa says:

    First off, congratulations!!! You mentioned that you and your husband aren’t really good at budgeting. Is that how the debt was incurred to begin with? If so, more money probably won’t change the situation unless you change how you’re handling your finances. I have read many budgeting books and I think a really great one is ‘America’s Cheapest Family Get You Right on The Money’ by Steve and Annette Economides. I would really start by learning where your money goes and start gaining control over it. Hopefully you’ll be able to live below your means and use the extra money for long term goals…paying off debt, building an emergency savings fund, a new car fund, a house fund, etc.

    Good luck, and remember, learning to budget is a skill and like most skills it can take some time to develop.

  • Meredith says:

    Here is what we did when my husbands salary doubled: We went out for a celebratory dinner not in the budget (it was Steak and Shake, nothing fancy). Then we got back into reality. More money when into 401K. More money went to debt. And more money got put into our cash funds, food, clothes, etc. so we could breathe a bit (we were living off bare bones….it depends on your situation). Aside from now I can afford eggs and milk weekly and we went out to Steak and Shake, nothing has really changed.

    Congrats on your raises!

    • Yes Meredith – great point about getting some breathing room.
      If not being able to pay normal bills and have a life* has caused the debt, make a new, realistic zero balance budget (I believe Dave Ramsey puts this as “naming every dollar”.) Make sure there’s at least a couple hundred dollars above your minimum debt payments as a budget category so you can start digging yourself out of debt.
      We had to use all raises for several years to get ourselves up to an acceptable standard of living. Once we could actually make ends meet, we started dividing raises: half to raising standard of living and half to 6 mo emergency fund and retirement.
      *My definition of ” have a life”: go *somewhere* at least once a month, even if it’s just a free day at a museum. Define what “have a life” means to you; my definition is travel; for some it’s Starbucks or eating out.

  • Karen says:

    Woot! Gotta love having some extra cash. 🙂

    Most everyone here has said to put all of it aside and keep the same budget so that you can pay off your debt. And that’s good advice, but I’m going to disagree.

    When we have had periods of low income, we put off a lot of needed purchases. If we needed new socks, or a dental visit, or car repairs… we put it off because we just didn’t have the money. So I expect that right now you have a lot of tempting ways to spend your new found income. It’s probably not just dinners out or concert tickets. It’s probably some things that you actually need to spend money on.

    Here’s my advice. For today, go celebrate. Have a nice dinner. Relax and enjoy the moment. But while you’re at dinner, set up a time to talk with your husband about all the different ways you could spend this money. Break it up into 4 categories: your normal lifestyle, your debt, purchases you really should make, and splurges you’d like to make eventually. Chances are, you can keep about the same lifestyle for now without really suffering. And you can also start to put money aside for paying off the debt. But if you’re down to 3 pairs of underwear, haven’t seen your doctor in 2 years, or have a leaking roof… you should take care of those things now. Once you’ve got the essentials out of the way, start knocking back that debt and maybe set a nice goal for a family vacation or some other small splurge.

    There’s a balance, and if you’ve been struggling financially for a few years, chances are you’re off-balance. Take some time to find your footing before you start running for the next big thing.

    • KaryanStratton says:

      Karen, this is fantastic advice!

    • Rachel says:

      Thanks! This is solid and appropriate! Helpful for me too!

    • Sheila says:

      Excellent advice.

      • Ann says:

        LOVE this advice! We have been putting two kids through college + grad school and delayed much-needed things like this. We have three older vehicles (2000, 2001, 2006) that are paid for but all three of them need new mufflers! Fortunately, our oldest has finished grad school, so with that extra money back in our bank account, we absolutely must get those new mufflers -and probably should go get our hearing checked! 😉

    • Melissa says:

      Great advice! I would set up a separate account where the extra money gets deposited. Then take a couple months and make a list with the four categories mentioned above. Look at the amount in the separate account and choose which items on the list are most important & spend the money on that. Periodically look over your list & decide how the money should be spent.

      I find when the money is automatically put somewhere else, it doesn’t just dribble out with nothing to show for it. I also like bigger amounts (rather put $500 towards debt in one payment than $100/month- just a psychological things, it isn’t advantageous financially, but it keeps me motivated)

  • AshleyB says:

    I figured most of the advice would be to live on your old salary and save/pay off debt with the rest. I want to offer a slightly different view.

    My husband and I have been lucky enough to be in this position twice during our marriage; we handled each a little bit differently. Before our first raises, we were living within our (meager) means and making ends meet, but we weren’t really satisfied with our budgets. When my husband got his first raise, we were able to start saving a little bit more, but we also changed our lifestyle; we started to eat healthier/more foods we enjoyed, and we actually had an eating-out-and-other-fun-things budget. This was really important to us, and really did raise our quality of living, which to us was really important. In that case, we used the extra money to improve our lives in the present.

    The second time we started getting more income (we both got new, better-paying jobs), we did decide to live on our old budgets and start putting the new extra towards savings/the debt we have. In this case, though, we are content with the quality of life our current budget affords us, so making this decision was an easy one.

    To make a long answer short: yes, definitely start paying off some of your debt with at least some of your new income, but if you have been living with a really strapped budget and now have a little more wiggle room, decide whether or not having some extra room in the budget would make you both more comfortable or happier.

  • Bec says:

    What a blessing! I highly recommend Dave Ramsey’s The Total Money Makeover if you are in debt and hate the b word! My husband and I have really struggled and now we are in this process and it is so liberating, knowing we are doing right with money! Check out audible.com – you get one free credit every month – and listen to the book on your commute, or over the dinner dishes, his podcasts are free and really great too – very motivating and inspiring! You go girl! Good luck!

  • Amanda L says:

    When we get extra money, I usually save half of it and put the other half towards our debt. We don’t have a ton of debt at this point, just our house and a small car loan because we had to upgrade our car for a new baby and it was cheaper for us to finance it because of incentives, than to pay for it in cash. Since this will be a consistent change, I would set aside a certain percentage for savings (we try to save at least 10% a month for general savings with additional going into college and retirement funds) and then put the rest towards debt for now. You know you can live on less from before! Once you have your debt paid off, then think about saving more, giving more, or spending more in particular areas where you are feeling a little squeezed. Congrats!

  • Elizabeth says:

    Congratulations! This is awesome news for your family. I’m sure you’ll get a lot of really great ideas. Different methods work for different people depending on their ability to stay on budget and be very strict with themselves. My first piece of advice is DO NOT LET THAT MONEY INTO YOUR HOUSEHOLD! If you crack open the door and start spending the money it will be gone and you won’t ever know what happened to it.

    In my opinion, best case would be to use the money to pay off your debt. I would open a separate bank account at a separate bank and have the money automatically deposited there. You could then set up auto pays to whatever accounts you wanted to pay off. This way you don’t have access to the money and can use it to get yourself out of debt.

    If you aren’t going to be strict enough with yourself to pay off your debt then I would recommend (if you aren’t already saving a lot) you put the entire amount into your 401K’s (or whatever retirement vehicle your company has).

    The real trick when you get a big raise like that (speaking from experience) is to not let is seep into your every day household income otherwise you’ll find yourself no better off in six months.

    Good luck!

  • I would suggest starting with the total amount that you each brought home prior to your pay raises and shave any excess off the top. For example, a previous pay of $500 (before raise) and now a total of $800. Take the five hundred and apply it towards your usual expenses and cut out anything you don’t need for additional savings. Live off what you previously made! Take the excess and split it between debt payment and building your emergency fund. If you have at least $1000 saved then you can apply more…if not, always start by building an emergency stash so you can quit relying on your debt.

  • Tiffany says:

    My suggestion: Make a written budget where every dollar bill each month is accounted for. Live on what you were living on before the pay raise and put everything else towards debt (and a little towards emergency savings). If you haven’t read ‘The Total Money Makeover’ by Dave Ramsey, I highly recommend it. Act as if you haven’t gotten a pay raise (even though it’s tempting to go have fun now)….I promise you won’t regret it when you’re debt free!!!

  • Lisa says:

    Congrats!! First thing first…go out to dinner. Alittle reward goes a long way.
    I am an a great budget-er/planner but I have no will power to say NO. Make sure everyone one in the family knows the budget. It will make it easier, that way your not being the mean mom for not getting a new car, those really awesome sneaker at the mall, or the extra treat at the grocery store…your budget gets the blame.
    I would make a spread sheet of all expenses and income. Our 401K comes out with out us even seeing it “out of sight , I cant spend it”. This also works for me in my saving account which I don’t have linked to my online banking. Is just too easy to for me to put a little extra into our checking.
    Everyone hates calling these people but call your “debtors” see about reducing the amount owed as in a settlement, or set up affordable payments.
    Pay down all the high interest small debt first while maintaining your reg bills,
    my reg bills are water, electric, mortgage, ect.
    Also set aside “fun money for fun day” doesn’t have to be much, my family does $100 for the 5 of us. Whether we go to a state park, movies, bowling. Every month its nice to break up the boredom, gives everyone a release and a chance to let loose.
    I hope this helps. Don’t get down our yourself if you fall off at first, get right back on that budget horse. Its takin me almost a year to get everyone on the same page. The kids are doing great on the budget but my hubby still nags me for stuff lol.

  • Shelley says:

    What good news! First, with a significant increase in income, you will want to determine how this may impact your tax liability. You may need to adjust your withholdings on your W-4 forms if you are bumped into a higher tax bracket–otherwise you may face an unwelcome bill in April. If you don’t have a budget, now is the time to make one–otherwise the extra money you are earning will seem to evaporate. Another suggestion would be to increase your giving if you contribute to a charity or church. If you don’t have an emergency fund, you should probably set one up so that you are prepared for those unexpected expenses that can derail a budget. All other money should be put toward paying down your debt. Once that is done, your focus can be on saving for retirement.

    • Sarah in Alaska says:

      Excellent advice about the taxes. That was going to be my advice although the payroll office should make an adjustment, the office may not be correct. Susie needs to evaluate how much she wants to bring home first and whether she should shelter any of that money from taxes (i.e. in a 401(k)). My number one priority would be the debt…but only after I’ve evaluated my tax situation.

      If you’re uncomfortable with having a budget, one way around it is to automate as much of the process as possible so that your behavior doesn’t get in the way. Others have recommended Dave Ramsey which is great. I would also recommend David Bach and his book, the Automatic Millionaire.

  • Karen Kline says:

    I would put all money from raise on debt. Your not living off of it yet so you won’t miss it.

  • K Groce says:

    Dave Ramsey’s system is an incredible system! Not only has it helped us budget, but it has wiggle room for us to have “blow money” and it helped me as a newlywed be at ease with someone else (my husband) handling our money! I never stress about money or how we are going to pay for things!!

  • Anonymous says:

    I would have the percentage of increase go directly into a savings account to where you don’t even notice it in your paycheck. You’ll be thankful later.

  • Ashlee says:

    We just went through this. We never stuck to a very strict budget before, but with all this money we sat down and created one we hope will work for us. The last thing I wanted is to have all this extra money and have nothing extra to show for it. We did allow a little more money for groceries and clothing (we’ve been in need of new clothing and have been putting it off for a while). We upped our savings a little and the rest is all going towards our debt snowball. I know most people on here are Dave Ramsey lovers but I only just read his book this week. If you haven’t read it before I’d suggest giving it a try. It certainly motivated me.

  • Jillbert says:

    First — congratulations on your raises. Second — pay off your debt! Your recent increase in salary should make this less painful than previously. You should put every penny possible toward your debt — it’s not your money, it’s theirs. Once your large amount of debt is gone, you can look at long term savings or lifestyle increases. (I am not a Dave Ramsey person — never read him — just a common sense kind of gal). 🙂

  • Jenny says:

    Congratulations on the raises!

    I’m a crazy penny pincher, but I’ve made up my own budget organization. I simply use excel and use the AutoSum tool. I write out what are expenses out & then use excel to have the numbers add or subtract for me. I set an amount for spending on fun for our family and also a separate amount for a monthly date night. Then of course I have all the bills: mortgage, cars, insurance, utilities & such. There’s also amount to spend on groceries, gas (I estimate high for this, then extra is saved), our children, our dog, & anything else we pay for each month.

    My husband’s pay is direct pay and so we’ve had an allotment to go right to our savings account. Any time he gets a raise that extra amount goes to savings. So I think if you write all your expenses out and be able to see on one piece of paper where your money is going to and then make a budget up it will help you to save. When I first made ours up and since we recently moved I’ve had to change our budget in order for it to fit us better.

    So remember it may take some time, but if you try sticking to a budget you’ll get use to it. They say it takes 21 days to make or break a habit, so if you try to stick to it for a month it should stick 🙂

    Good luck!
    ~Jenny

  • Karen C says:

    I totally agree with everyone that said take yourselves out for a congratulatory dinner. A place that you love, then stop right there!

    I don’t know what kind of an emergency fund you have or how much debt. I think I would take the difference in take home pay and split it between these two catagories until I had an 8 month emergency fund (believe me, I’ve lived this and it’s important). Then I would throw the whole amount against the debt, starting with the highest interest rate.

    But I would make some deviations. I agree with the comments about taking some of it to take care of any medical or dental issues. They just get bigger.

    Very important is to understand your financial status. What comes in and what goes out. If you track “all” of your expenses for a period of time you will be amazed at what you learn. Set aside a time once a month to go over the financial picture with your husband. Spending a little on a sitter or fast food so you can do this is totally OK. Someone in the comments mentioned ” you can’t fix money problems with money”. That is so true! Being aware of the present reality and planning a goal for the future is the key.

    And don’t just track your debt, track your success as you pay down those balances! Congrats and good luck!

  • Rita says:

    Congratulations on pay raises for both of you, I am one of those people who really struggle with budgeting – I have to use cash envelopes and don’t even carry a debt or credit card with me anymore after finally becoming debt free (except for a mortgage) so I would not let that money even come into my household, with that being said I would start a contingency fund if you don’t have one – most companies offer direct deposit into a credit union or put it into your 401k plan. Whatever you decide, sit down with your husband and have a good heart to heart talk so you are both on the same page as to where the money will go and hold each other accountable whatever you decide to do – weekly budget meetings really help my husband and I keep on task..

  • Susan says:

    I agree with Karen and AshleyB. My thoughts exactly. Of course paying off debt is important and worthwhile, but it’s not the only thing to consider.

    Susie didn’t mention their standard of living. I been in the situation where I was barely scraping by, and it’s not a pleasant place to be. When my income rose, I improved my standard of living. I bought some nicer clothes and shoes, I joined a gym, I put money towards home repairs. Some readers may thing that this is irresponsible if you have a lot of debt, but I disagree. All of these things made me feel so much better about myself and my home, and it was money well spent.

  • Roberta says:

    Congrats. If it were me, I would apply the $10 after taxes raise to pay extra on your debt to get it down faster and save the $5 after taxes raise for future bills (tires, appliance repair, etc) so you don’t have to whip out the credit card to pay for it. You should be debt free with a large savings account in no time at all.

  • NatPatBen says:

    Congratulations! I just got a nice raise yesterday & my previously-stay-at-home-dad husband rejoined the workforce a month ago, so I know how exciting that is.

    The first thing I did when I got home from work was to redo my budget for the rest of this year and next year (I use Excel) factoring in what I estimate the net increase will be each paycheck, as well as my husband’s part time income.

    The extra money was distributed among:
    – more tithes & offering
    – more $ toward principal on house
    – more $ in emergency fund
    – more $ in groceries envelope (because my current budget in that area has been unrealistic ever since I drastically reduced couponing)
    – more discretionary money for my husband and myself
    – a raise to our cleaning lady
    – paying off this $12k air conditioning system we got earlier this year with 18 mos of interest free financing. We were about $1k short of where I wanted to be in paying that off, so this raise will help us catch up in no time
    – starting to save again for vacations, as we intend to go to Europe next year since I have enough miles for 2 round-trip tickets.

    Being quite familiar with Dave Ramsey’s book & advice, I know that his method would have me put even more money toward emergency fund until that is bigger THEN putting extra toward the mortgage, but I REALLY don’t like owing anybody anything, so I want to pay it off within the next 8-9 years (for 10 years total).

  • Ashlee Pettit says:

    Read Totally Money Makeover by Dave Ramsey…He gives a great outline of a plan.

  • Krista says:

    Count your blessings! Many people are facing salary cuts so enjoy it! I recently had a pay raise and decided we needed to increase the amount in our monthly cash envelopes and budget more for food so that we could eat healthier. We have cash envelopes (Dave Ramsey system) for eating out/fun and our personal blow money to name a few. For us, it was important to increase those amounts a little bit so that we don’t feel like we are suffering so much for so long. Our getting out of debt will take many, many years, not just 1 or 2 years like many Dave Ramsey listeners. So our strict budget is going to stick around for a long time (if not forever). Maybe you don’t feel like you are restricted in your budget currently, so you may not need to do this. With my pay raise I am also able to put more into savings each month and pay off more debt. I love and agree with just about everything Dave Ramsey says, so I would highly recommend reading the book and even signing up for the financial peace university class if it is available to you. The first step is to save up $1000 for your emergency fund. So with your large pay raises, you should be able to do that very quickly before you start paying off more debt. Whatever you do, good luck!

  • Louise says:

    Congratulations on the pay raises. I’d “celebrate” in some way – either a nice meal out or even a trip to the ice cream parlor – just something positive for the both of you. If you don’t have an “emergency fund” – set aside all your extra $s toward your rainy day fund. Even 3 months of what is necessary to keep your household running is helpful. Then don’t touch this emergency fund, unless something breaks down – washer, refrigerator, etc.

    Then I’d line up the outstanding debts, pay off the smallest ones first, & then work up to the larger ones. Or line them up & pay off the one with the highest interest rate. Don’t forget you’ll be paying a little more income tax so set aside some to cover that.

    Once you are half-way through paying the debts, maybe “celebrate” with one more nice meal out. Once you are done with those interest eating debts, so something really nice for yourselves – like a weekend away – something to really reward yourselves for the hard work and becoming debt free.

    Except for a mortgage and car payments, I raised three children as a single Mom. I did have a good job, but things were very tight financially. Fortunately, back then, all the new electronic gadgets like cell-phones and lap-tops were not around. Today, I own my home debt-free. It needs to be updated, but is clean and decent. My children will tell you we had a frugal way of living, yet we had food, clothing, and shelter. Once a month, I did shop with coupons, which saved me about $200 on food and household items.

    Good luck – you can do it too!

  • Stephanie says:

    Having decimated our emergency fund due to medical expenses I would say build an emergency fund first before paying down debt. Before paying down debt I would also take care of delayed maintenance/healthcare. Do you need new glasses? When was the last time you saw the dentist/had a physical? Do you have bald tires? Is you refrigerator dying? Are your shoes beyond repair? Is anything you own coming to the end of its useful life? Paying down debt is great but you need to take care of yourself first so that you don’t land in more debt from little problems that become big problems because they weren’t dealt with. We have two friends who landed with massive expenses one from a shoe they kept meaning to repair but the rip in the leather was minor and they didn’t have the cash to have it repaired then they tripped and broke their leg. $10 repair vs. hospital bills and missed work. Another had the fan in their bathroom die and they took their time to deal with it, within three weeks their bathroom was covered in mold and they had to have the ceiling and walls redone. $100 for a new fan vs. $2000 to fix the bathroom.
    If you take care of yourselves first by keeping yourselves and your stuff in good shape and having money in the bank problems can hit you and it is just a bump in the road instead of a traumatic detour. It doesn’t help you to pay extra to debt if it means that life’s surprises are going to go on a credit card or ignored due to lack of funds.

  • Anita says:

    I would strongly suggest doing the Financial Peace University Program with Dave Ramsey. It is a great program that goes in depth on how to set and implement a budget. Their online sources are great too!

    Their company can also help you find a mentor in your area that will work with you on setting up the budget if you need more one-on-one help. Start there 🙂

    Best of luck!!

  • Claire says:

    Hi Susie, There is a site, http://www.betterbudgeting.com. You can join it for free and it has all different worksheets that you can use to help you budget.

  • Shirley W says:

    Congrats to both of you! My first thoughts are to put half into your savings and use the other half to focus on paying off debt. Resist the urge to splurge!

  • Jessica says:

    evaluate limits on where you plan to put the money.
    Do any loans have a penalty for early pay off? If it’s not small, can you pay multiple loans at once, so you do not incurr the penalty?
    retirement accounts can have limits. If you are below the threshold age, I believe it is <20k. If you go over, you have to file an ammendment to your taxes. I did this on accident and it was more $ and trouble than I would want to repeat.

    For savings, start with 6 months of expenses, move to 6 months of pay. then, see if you can increase it, in hopes of a next raise.

    my pay does not hit regularly, nor to expense reimbursements. I have gotten myself to a place where I pay off credit card debt regularly. So each time I DO recieve a paycheck, I put a standard amount to "savings" (includes regular items like car insurance, as well as emergency net), some "invest" money (50-300$), and an amount aside for my mortgage. If I worked OT on that paycheck, mortgage pay gets another bump. Then I leave it be (remember, not paid regularly). When that account starts to reach a threshhold I set, I look at how to budget the excess. Usually it would go to mortgage and "savings", but this time, I am saving to replace my fridge.

  • Mary says:

    You’ve gotten great advice about budgeting. I don’t know where you are in your life, but if you have children, or desire to in the future, and are interested in one parent being home with them, try to move towards living off one income. Use the other income (or whatever is left after you cut your budget as much as possible) to pay your debts.

  • Janette says:

    My mom has always said.. If you lived without it before you got it then put it away in a savings account. You can make a second account for your raise and use that money for fun things and your husbands for life’s unexpected moments..

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