First off: Thanks to all for the kind response to my good news yesterday! I know it can sometimes be difficult to celebrate in others’ blessings, especially in this tough economy, so I appreciate all of the kind words. :)
I had NO idea this was happening. I really am not sure yet how I feel since my workload will almost double in the next few months. But I am excited about the challenge that this new work will bring!
Of course, the first thing I thought of when I heard “raise” was how in the world I will allocate this extra money coming in. And that’s where I’ll need your help! I feel like I am helpless to make decisions without my trusty PF bloggers backing it up. ;) I did some math and will be getting about $185 extra in take home pay a month. This will not be shown on my next paycheck, but the one I receive at the very end of September.
So here are the choices I’ve come up with. Vote on what YOU would do or give me another option.
A. Save towards my Emergency Fund.
Currently I am saving only when I get extra income or gifts–an average of $70 a month. This will increase to approximately $260 per month and $3020 in a year. With $2200 already in the account, I’ll be closer to my $6,000 goal in one year and certainly have the security that comes with more savings.
B. Put it towards debt.
If I put the entire amount towards debt, then I will increase my monthly payment from $500 to $685. This will allow me to pay off the debt in eight months rather than one year.
C. Contribute 5% to my 401(k)
Right now I am not contributing anything to my 401(k), aside from the base 3% that my employer contributes. This will bring no change to my monthly budget, but increase my net worth and of course benefit Future Me.
D. Contribute towards my Roth IRA
Currently I contribute $100 a month to my Roth IRA. If this is the option, I would increase my monthly amount to $285. Similar to Option C, this would not affect my savings or debt-paying goals, but certainly help later with compounded interest.
E. A mixture of All?
Save $100. Pay $50 to debt. Put $35 to my Roth IRA. Or another mixture of the extra money?
F. Add the $185 to my Clothing budget and spend it frivolously every month.
Ahem. I can tell you guys right now this is not what I am going to do. But perhaps I can get enough readers to convince me it’s the right thing?! I would certainly enjoy using this allowance for shoes and jackets and skirts….
So, what would YOU do if you were in my place?
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