Smart Ways to Use a Raise: Prepare for a More Secure Future

Receiving a raise is an exciting moment—it’s a reward for your hard work and an opportunity to improve your financial well-being. While it might be tempting to splurge, using the extra income wisely can set you up for long-term success. These strategies can help you make the most of your raise and build a stronger financial future.

1. Pay Down Debts
High-interest debt, like credit cards or personal loans, can drain your finances. Use your raise to make extra payments toward your debt. Eliminating balances faster not only saves you money on interest but also reduces financial stress and frees up cash flow for future goals.

2. Establish a Rainy Day Fund
A rainy day or emergency fund is your financial safety net. Aim to save at least three to six months’ worth of expenses in a separate savings account. Use a portion of your raise to start or build this fund so you’re prepared for unexpected expenses like medical bills or car repairs.

3. Boost Your Retirement Savings
Increasing your retirement savings rate is one of the best ways to secure your future. Contributing to a 401(k) or IRA not only grows your nest egg but also offers significant tax benefits. Pre-tax contributions lower your taxable income, while Roth accounts allow for tax-free growth.

If your company offers a 401(k) match, make it a priority to contribute at least up to the matching amount. Otherwise, you’re leaving free money on the table! For example, if your employer matches 50% of your contributions up to 6% of your salary, that’s a guaranteed return on your investment.

4. Plan for the Long Term
A raise is the perfect time to review your overall financial strategy. Consider working with a financial professional to evaluate your retirement plan, ensure your investments align with your goals, and identify other ways to maximize your income.

Contact Us for Personalized Guidance
If you’re ready to take your financial planning to the next level, we’re here to help. Contact our office today for a deeper evaluation of your retirement plan and strategy. Let’s make your raise work for you now and in the years to come.

About the Author: Mark Roberts

In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution. Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies. Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.” Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.

Smart Ways to Use a Raise: Prepare for a More Secure Future

Smart Ways to Use a Raise: Prepare for a More Secure Future

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About the Author: Mark Roberts