5 ways a raise could be bad for your finances

Congratulations! You’re finally getting the raise you’ve been working on. The extra money in your bank account will help secure your finances and bring you closer to your goals…right?

Not always. Sometimes the excitement of putting more cash in your pocket on a regular basis has a bigger effect on your heart than your brain.This can lead to lifestyle creep – when making more money leads to spending more something better. Like a better car, a bigger wardrobe, and a better vacation.

Although it’s okay to treat yourself once in a while – you deserve it! – Spending more on things you don’t need and skipping important financial choices can delay your financial success and possibly even your retirement planning.

So even if your direct deposit has grown these days, don’t get distracted by all the shiny new things you can afford right now. By making these mistakes, your raise may actually be doing more damage to your financial goals.

Mistake 1: Not increasing your 401(k) contributions

When you get a raise, one of the smartest things you can do is increase your retirement savings contributions. If you don’t need the extra cash to pay your bills, you won’t miss it — but when you see your 401(k) grow, you’ll happily tuck it away.

If your employer matches each contribution, that could mean hundreds of thousands of dollars more in your account when you retire. This is free money!

However, if you cannot take advantage of this employer benefit because you really need all your paycheck each month, a company called Lendtable will give you cash.

We know it sounds too good to be true. However, if your employer has a 401(k) matching plan, this is money they have already assigned to you. By using Lendtable, you will be able to unlock that free cash.

Let’s say you make $50 a year and your employer matches your 401(k) contribution to 4%. If you put $0 into a retirement account this year, you’ll get $0 from your boss. If Lendtable lends you 4% of the salary your employer is willing to match, then you get $2,000 from your boss, minus Lendtable’s fees. (This comes from the extra money you earn, so you don’t have to sacrifice.)

It takes three minutes to answer a few questions about your eligibility and sign up for an account.

Once you get your full matching amount from your employer, LendTable will get back the money they lent you, along with a small percentage of your profits. If your retirement account provider is penalized for withdrawing funds, Lendtable will also cover that fee.

Your risk is essentially non-existent, so not using your employer to match Lendtable’s offer will make you, future millionaire, bow your head in shame. start here.

Mistake #2: Not putting more money into your investments

As you start making more money, you might think it’s wise to add it to your savings account.

Unfortunately, saving alone may not be enough for you to build wealth. You’re on the right track, but the money you’re stashing isn’t growing as expected.To retire comfortably, it helps grow Your money.That’s why we like a Tibetan.1

You also don’t need a fortune – you can get started with just $5. You can invest in well-known companies like Amazon, Google or Apple without paying for expensive full stock. The best part? Some companies may even send you a quarterly check for your share of profits, called dividends. If these companies are profitable, so can you.

takes two minutes Sign up, and your investment is protected. In Stash, investments are held by its custodian, Apex Clearing Corporation, a member of the Securities Investor Protection Corporation (SIPC) – which is the industry saying, “Your money comes from protection.”2

Now, Stash will even give you a $5 bonus once you deposit $5 into your account. 3 The sooner you start investing, the more growth potential your capital has.

Mistake #3: Not adding more money to your emergency fund

Your emergency fund is an important safety net — when you get a raise, you can hit your target numbers faster.

Not only should you use a safe place to store it, but you should also use an account that will allow you to earn more money from your savings.

Get nothing under your mattress or in your safe. A typical savings account won’t do you any good. (Ahem, 0.06% is nothing now.)

But the debit card calls desire Allows you to earn up to 16 times the average interest on the funds in your account.

Not too shabby!

Please enter your email address here Get a free Aspiration Spend and Save account. After confirming your email, securely link your bank account so they can start helping you get extra cash. Your money is FDIC insured and they use military grade encryption which is what nerds call “it’s completely safe”.

Mistake #4: Not protecting your family

Have you ever thought about how your family will operate after you leave without income? How will they pay the bills? Send your kids to school? Now that you’ve received a raise, it’s a good time to start planning for the future by researching term life insurance policies.

You might be thinking: Even with a raise, I don’t have the time or money.But your application may take a few minutes – you can have your family give.

Pricing starts at just $16 per month. The peace of mind knowing your family is taken care of is invaluable.

If you’re under 54 and want to get a quick life insurance quote without a medical exam or even getting up from the couch, Get a free quote from Bestow.

Mistake #5: Overspending because you can now “afford it”

Just because you make more money doesn’t mean you should spend more.

So wouldn’t it be great if you’re getting an alert when you’re shopping online at Target and you’re about to overpay?

that’s exactly this Free service Do.

Just add it to your browser for free, and before you check out, it checks other sites, including Walmart, eBay, and more, to see if your item is available for cheaper. Plus, you can get coupon codes, set price drop alerts, and even view an item’s price history.

Let’s say you’re shopping for a new TV, and let’s say you found the best deal. Here, you’ll get a pop-up letting you know if that exact TV is available for cheaper elsewhere. If there are any coupon codes available, they will also be automatically applied to your order.

Last year, this saved people $160 million.

You can get started in just a few clicks See if you’ve overpaid online.

Capital One Shopping compensates us when you use the provided link to obtain an extension.

Kari Faber is a staff writer for The Penny Hoarder

1 For retirement, Stash offers access to a traditional or Roth IRA.

2It is important to note that SIPC coverage does not guarantee a potential loss of market value. Apex Clearing Corporation is an SEC-registered third-party broker-dealer and a member of FINRA/SIPC.

There is no guarantee that any stock will pay a dividend within a quarter or a year. Dividends may be subject to additional tax and are considered taxable income. See the IRS for more information.

3Offer is subject to Terms and conditions. In order to be eligible to participate in this promotion and receive the bonus, you must complete the following steps: (i) successfully complete the designated registration process for opening a personal taxable brokerage account (“Personal Portfolio”), (ii) link a funding account (eg. external bank account) to your Personal Portfolio and (iii) initiate and complete a minimum deposit of at least five U.S. dollars ($5.00) into your Personal Portfolio.If you only complete the specified registration process for financial advisory services (such as your Consulting Agreement) or have not completed the account opening process for an individual taxable brokerage account (“Personal Portfolio”), you will not be eligible for the bonus.

Penny Hoarder is a paid attorney for Stash.

This information is for educational purposes only. This material is not intended as investment advice, nor does it imply that any security is suitable for investment by any particular investor. Investment advice is provided to Stash clients only. All investments carry risk and may lose value. All product and company names are trademarks™ or registered ® trademarks of their respective owners. Their use does not imply any association with or endorsement by them.

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