I’ll Pay Down My Debt When I Get a Raise

Kofi Gyebi
Founder, 400 LBElephant

You’re a rockstar so you got the rase! ! Let’s look at some things not do:

  • Do not get rid of that roommate because you’re making more money. It’s the knee jerk reaction.  
  • Stop making payments. Interest. Interest accrues aggressively with debt especially if we’re not covering the debt.
  • Upgrade to a new apartment in an upscale part of and pay more in rent.
  • Buy a new car, please don’t do this! Keep driving that same car, last thing we need are more loans dipping into our raise!

You follow 400LBElephant and you’re crushing it. Here are a few tips:

A few things you should do: 

  • Live below your means and throw that extra income at your debt,
  • Most sources say your rent should be no more than 30% of your annual income.
  • Get a side hustle walking dogs, Uber, Lyft, selling stuff.
  • Maybe a second job.
  • Love on yourself, self care matters!
  • Maybe increase your contribution to your 401K
  • Understand the numbers; net vs. growth.
  • Keep growing that sinking fund.
  • Meet with a financial planner.

With your raise now you can go on trips using the money you saved from your sinking fund!   Treat yourself to a nice dinner or a massage as long as it’s built into the budget. That’ll allow you to spend without guilt or worry. Paying off debt is like any muscle, you have to exercise it early and often to get the most out of it. We build habits and the sooner we build and practice positive habits the easier paying debt becomes. Some people live on less when they get raises, and use the increase in income to spend more. Choose wisely.

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