Jul 28, 2008

What to do with salary increase?

J and I get our salary increases in winter. I don't remember what month he gets his, but I should have mine in August. But I'm not. I'm still getting one of course but the organization is currently implementing a new process for performance development, introducing grading and some other bits I don't know about yet. All we know so far is that we'll get our raises in September backdated all the way to July 1st.


Well, it's not necessarily windfall but it will feel like it. J and I have agreed that our backdated increases will go directly to debt. I just want to get rid of debt as fast as I can. It's just not pleasant every time I sit down with the budget staring me at the face. We have tab in the budget spreadsheet called Debt Monitor, and I'm telling you that it's not going below $8K despite attempts. Urgh.

We even have new additions to our debt. I'm not going to put away the usual amount in savings so that I can add more into our debt snowball. I usually save 15% or more every fornight but the next fortnight we'll make do with 10%.

So the August goal is to get debt close to $8K. I choose the word "close" because I'm not certain that we can get it down to $8.5K you see. Let's just try and see.


  1. My last big salary increase (15%) was used to pay the rent on a one bedroom apartment and be done with roommates forever! Not the most frugal move, but one of the best things I've spent my money on!

  2. wow, good for you for using teh windfall/pay increase on debt removal!! are you going to take a few percent to increase your lifestyle like some recommend? it would be a nice bonus.

  3. savingdiva: i'd probably do the same. i have my preferences that i still practice in line with my frugality :)

    sense: i thought one should retain a frugal lifestyle and not change whenever there's an increase in income? to answer your question, no, we're not planning on increasing our lifestyle.