Putting My Money Where My Mouth Is

It’s a Monday, y’all. Whew.

I know in my post about savings, I iterated that when I get “extra income” I like to have a plan. Last week my company announced a bonus to be paid out to all employees and an hourly raise to replace its previous annual profit sharing plan. This is pretty exciting (who’s going to say no to a raise??), but I knew that to avoid blowing the bonus, I’d need to think ahead.

This “extra” paycheck is a percentage of my annual income, but I don’t know the exact amount until it gets deposited this into my account. We’ll estimate on the low end and (after taxes) operate with the number of $500. This is a nice, round number and it will give you an idea of how I try to deal wisely with any extra income.

As I stated previously, I try to contribute about half to savings. I currently have an extra withdrawal scheduled from my checking account to my online savings account for $200, in addition to the 5% that automatically gets deposited into that account biweekly. If we’re working with the number $500, $200 is slightly less than half, so I presumably would deposit the other $50 into my savings account at my local financial. This money is more easily accessible to me but earns less interest than my online accounts, so it gets the lesser amount.

I have also scheduled two payments to two of my credit cards that are carrying a balance (darn you, Amazon Prime Day and Target’s Big One Day Sale!), so this accounts for another $200 of scheduled payments. This leaves me with another theoretical $50 that I could apply to my vehicle loan or that pesky dental bill waiting to be paid. I emphasize the automatic withdrawals because I KNOW how easy it is to blow through extra money over the course of a weekend, even if you have the best intentions. $50 on a night at the movies with your sweetheart can quickly turn into $300 blown at the movies, dinner, drinks, and shopping.

A raise also requires a look at my budget and adjustments to be made accordingly. I typically ramp up the amount being put into my personal savings accounts, but this time around I have a vehicle loan, so I’ll be raising the amount of my biweekly loan payments as well.

It’s nice to sometimes spend a small part of that extra income on something fun, but because I’m carrying a balance on two of my credit cardsand I have an extra bill (dentist), I know the responsible thing to do is make the extra payments. Because I budget for a little ‘fun money’ every month, I don’t feel the need to blow my bonus. In other words, because I’m not depriving myself from week to week, that extra money doesn’t feel like it’s burning a hole in my pocket. That’s why the 50-30-20 budget is so effective (for me, anyway)- it allows you to spend that 30% on whatever you choose each month. Budgeting is like dieting- you can have a piece of maw maw’s pecan pie, as long as you skip the mayo-heavy potato salad. It’s all about BALANCE.

What are your thoughts when it comes those unexpected extra influxes of cash? Are you a saver or an indulger?

Hope y’alls Mondays are spectacular! 😊

Much love,

Zoe’

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