I was out with the boys Monday night, catching the highly anticipated debut of Andrew Wiggins (go, Ender, go!) in the game between Kansas and Duke. I stumbled home in the wee hours of the morning to catch some much needed zzz’s before another early morning with our early-riser of a toddler. The morning came too soon. The little bugger woke up crying at 3AM because he wanted a glass of milk. He then proceeded to wake up for the day at 5AM. Suffice to say, yesterday morning was not the greatest.

Then, after a long morning meeting, my boss called me aside and asked if we could talk. “Oh, great,” I thought, “what could it be now?” “We’ve been aware of the recent contributions you’ve made and would like to recognize your efforts with an increase to your salary.” Booyeah.

7 Things to do with a Pay Raise

Spend It
I’d love to get my hands on a sleek new ultrabook or a shell out for a network-attached storage solution. Since those are a bit pricey, reaching out for the lower hanging Nexus 5 fruit is very appealing.

Give Some to Charity
We’re very fortunate to be blessed with the problem of needing to decide what to do with more money. As we’re given more, more is expected and we will be giving of our increase.

Say Thanks
Emily’s family has long since had a tradition where the increase from the first paycheque after a raise is used to take everyone out for dinner. It’s a great reason to celebrate together and a small way to show gratitude for their support.

Pay Off Debt
A smart thing to do with the extra cash is to pay off debt. We have our mortgage. Maybe we’ll increase our biweekly payments or drop a lump sum later down the road.

Stock an Emergency Fund
The extra money earned from a raise could also be used to pad our emergency fund, but in our case, we’re comfortable with the amount we have set aside.

Save/Invest it
A higher salary allows us save more. We could choose to save for retirement or put it towards a down payment.

Increase the Budget
We keep to a pretty tight budget. With the extra cashflow, we could opt to loosen the belt and put some of the hard earned dollars towards entertainment or increasing our personal spending allowance.

Decisions, Decisions

There are lots of different ways that we could spend the extra income from a pay raise, but the decision as to how to spend it should align with our financial goals. The plan is to put a larger percentage of our income in either our RRSP or TFSA with the intent to max out as many of the registered accounts as we can. We may also consider life insurance and increasing our mortgage payments. Sensible decisions aren’t as riveting as a the latest gadgets, but the prospect of being financially independent that much sooner, now that’s exciting.

How would you get your raise on?