Got A Salary Raise? Here Is How You Manage Your Money Starting Now

By Lilian Wamaitha
“I have been in the job market for a year and a half now working for an IT firm here in nairobi. In January, my boss reviewed my salary and to my suprise doubled what I was earning. I am now earning 60,000 and considering that I am only 25, I believe that I don’t know how to manage my money especially after the raise. It’s only the first week of march and after deducting all my expenses I only have about 4,000 shillings left in my account. Where my money has gone is what I can not account for. What do I do to start being more financially responsible?” reads an email from Tony (not his real name).
For most of us like Tony having a salary increase means a larger lifestyle but whichever the case, overspending will see you in debt or something worse.
I believe that age has nothing to do with how you manage your money. If I am not wrong, Tony went on a spending spress considering he was only earning 30K and now has more money in the bank.
It is important to understand that getting a salary raise is not an easy thing. A better salary comes with the desire to overspend or make bad financial decisions.
Here are a few tips that I believe if taken into consideration will help you make better financial decisions with or without a salary increase.
1. Start saving
A check off is a mechanism which provides for regular payment of an obligation such as a savings account or a Sacco contribution.
For Tony, he could save at least 25K every month and assign the reast to his monthly budget. This allows for tracking of your money and it also restricts you from overspending.
A check off is a way of saving that can give you a boost during an emergency in your life such as offsetting a medical bill or when you lose your job unexpectedly.
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2. Reward yourself
What would be the use of having a good salary and having to live a miser’s life?
Rewarding yourself does not necessarily mean that you take overseas trips with a shop-till-you-drop mentality.
It simply means; thanking yourself for working hard to get to that point. The advantage of this is that it makes you content and you can continue with your life normally feeling appreciated.
3. Think about investing
Saving is important but that money in the bank will not do you any good if you don’t invest it.
Infact, having some money in your account only adds to the pressure of wanting to spend it especially when you are broke.
No matter what salary you get, think of profitable businesss ideas that you could engage in.
Who knows, what you will start today as your side hustle may end up being your main hustle and you will be sorted for life.
4. Stick to your original budget
It is a common mistake for people to expand their budgets to fit with their new salary.
I do not advocate for this because it adds unnecessary expenses on to your budget. Sticking to that budget restricts you from overspending.
Afterall, if you were doing well with that budget why change it?
However, if you have not been operating with a budget, I believe that this is the most appropriate time to create one.
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5. Do not tell everyone about how much you are earning now
With the excitement you may probably let your family and close friends in on your paycheck amount. While it may sound okay to share in your achievements, it brings problems.
You now have everyone borrowing money from you and not refunding it since they already know the amount in your account.
Let what you earn be between you and your bank account.
There is a lot ahead in life so work to better your financial security. Remember that to whoever much is given more is expected of him, so manage yourself right now and avoid regrets later.
Lilian is a Communication Officer at Career Point Kenya? Got any financial related queries? Email them to lilian@www.careerpointkenya.co.ke.