Closing down 2015 brings us year end reviews at work! Usually that would include a raise, even if it is a small amount. Everyone loves to get a raise. As of this writing, the average raise is usually about 3% of your base salary. Not too shabby!

That means if you are making $50,000 a year, your raise would be $1,500! To make this a bit easier for calculating,  let’s just give ourselves a raise of $100 per month after taxes, an extra $1200 per year. Now to some that may not seem like a lot of money and to others that is a huge amount. But what should you do with the money?

Here’s something for you: A raise is not a license to inflate your lifestyle. A raise is an opportunity.

Tweet: A raise is not a license to inflate your lifestyle. A raise is an opportunity.

Especially if you are in debt, should you follow that statement. An extra $1200 a year is a lot to pay toward an interest bearing credit card and could potentially save you hundreds of dollars.

There’s also a lot you could do with that money if you don’t have any debt. An extra $1200 a year is a lot to save for retirement. Even without calculating interest, over 30 years that money adds up to $36,000! Awesome!

If you don’t have much debt and are already saving a lot for retirement, then the third (and in my opinion, the best) option is using that $100 per month exclusively for giving to people. One of the themes of Atypical Finance is to “Do Something Different” with your money. That means using it to bless others and give back. If you get a raise of $100 a month and you use that exclusively to others’ lives, than that literally would not have any financial burden on you. You would just be living exactly how you lived before the raise. It is a huge opportunity to be able to help someone out or give to a (well-researched) charitable organization.

What you do with the money is obviously your decision and your decision alone. The point is to not change your lifestyle because of a raise. Living well below your means protects you if anything were to happen to a job, puts a lot less stress on your financial life, and allows you to have a lot more flexibility if you want to give something up and chase your dreams.

What it creates is freedom. Financial freedom.

So next time you get a raise really consider what you want to do with that money instead of purchasing something that is going to eat up that extra $100 a month.

Do something different. 

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