How to Adjust to a New Budget When Income Increases or Decreases: Part 1

How to Adjust to a New Budget When Income Increases or Decreases:  Part 1

Creating a budget is a milestone for anyone and takes a lot of careful consideration.  How do you decide when it’s time to change the way you arrange your hard earned dollars?  Follow a few of our suggestions to kick your new budget plan into action.

 

How to Adjust When Income Increases

If you’ve recently experienced a considerable increase in your salary, inherited funds or stock, or just have a great tax return refund, it’s time to decide where that new cash flow should go. 

 

Distinguish if this cash is reoccurring or a one-time bonus.
This will help decide how to put your money into the smartest funds.  One-time cash increases can benefit you with new investment possibilities. 

Reoccurring increases in your account will beg questions, such as “Is it time to increase your 401k?  Or redirect the monthly budget completely?”

 

Keep the future in mind.
Whether it’s a CD, savings, holiday, or special emergency funds, it’s a great way to kick start a new way of saving money.

 

Consider Paying Off Large, High Interest Debts
When reviewing your budget, think about investing part of the income increase to any large, high interest debts.  If you’re already automating your finances, adding a higher monthly payment to any debts will give you more money in the long run.

 

Follow the second-part to this series, “How to Stick to Your New Budget When Income Decreases:  Part 2,” to learn how to tackle when household income decreases.

 

Design a budget that works for you and check out our other financial resources.  Questions about getting on financial track?  We’d love to help.  Call us at 877-325-2848 for more information or reach us through our contact form.

 


Thank you for your thoughts and comments on this blog topic. We welcome hearing from you. For your security, please do not to request transactions to your account in your comments. Additionally, do not include confidential information in your comments as this communication is not a secure channel for transmission.