7 things to do with your money if you get a raise - Wage rise 7 personal finances new ideas 2021 - Having a raise is always very positive news for personal finances.

If you have managed to get your company to increase your salary, you may wonder what you can do with that surplus of money. The planning changes completely and you will have room for manoeuvre with which you can play for greater economic freedom, in addition to enjoying good financial health.

It is important that, even if you earn more money, you do not lose the basic notions of personal finance: from maintaining good saving habits, to not spending more than you earn or controlling expenses. There's no need to go crazy, even if your situation has stabilized much more.

Wage rise 7 personal finances new ideas 2021

Therefore, there are a series of tips that you should follow when you have increased your salary that can serve as a reference for decision making.

1. Reevaluate your personal finances

Of course, the first step that should be done with capital is to review the current financial situation. You earn more money, which brings changes to your overall economic scheme. It modifies your net salary, your available budget and possibly your tax to the Treasury.

To get started, you need to find out what your net salary is. Once you know it you will be able to know how many taxes you have to pay. In addition, you have to review your debt and savings goals, which can be revised upwards as you receive more money each month.

Next, wealth management experts recommend that you determine which financial goal you'd like to focus your annual increase on. This can mean that you direct much of that extra revenue to a specific goal. Also attack some targets simultaneously.

Wage rise 7 personal finances new ideas 2021

2. Cut your debts as much as possible

Debts, such as credit cards and loans, charge long-term interest. They can be a slab.

In this way, in order to avoid the high cost of borrowing money, you can take advantage of the fact that you earn more money to be free of charges. In this sense, there are many strategies around debt repayment. When you decide which option best suits your needs, think about which option will help you achieve your goals.

3. Check your emergency fund

One of the methods that can protect us from debts or adverse financial situations is to have a correct planning. In the event that you didn't reach your emergency fund savings goal earlier, consider using part of that increase to accelerate this segment that is meant to slow down contingencies that may arise.

The emergency fund is a key point within personal finances. Some wealth experts advise that it be at least 3 times your monthly salary. Consider having that margin saved if you have not previously achieved it.

Wage rise 7 personal finances new ideas 2021

4. Save for achievable goals

Since you've already reviewed your financial planning, it's important that you've set goals. Some of them may be in the medium term. That's why some of that savings should go towards goals you can achieve-from moving to a bigger home to a new vehicle.

Using that capital for specific purposes can be an interesting alternative to consider.

5. Increase contributions to your retirement plan

Beyond thinking about the short term, it is important that part of that surplus of money that you are going to earn is allocated to a wider horizon. The more funds you can set aside earlier for retirement, the more time your savings will have to grow larger when you retire.

If you don't already have a plan designed for your retirement, the moment when your salary is increased is ideal for you to start thinking about it. There are many possible alternatives: from pension plans, investment funds, portfolio of securities, remunerated accounts. The important thing is that you allocate capital to long-term savings.

Wage rise 7 personal finances new ideas 2021

6. Invest some of the money

Apart from the fact that saving is a method that always has to be applied, one of the things that you should not miss is to work part of the money that you have managed to save. Investing is essential to obtain returns on the assets we already have.

Consider focusing on beating inflation, which is essential in order not to lose purchasing power over time.

7. Treat yourself

Last but not least, an increase is always a cause for joy and celebration. Book some of that salary upgrade to treat yourself to a spa day, an intimate dinner or a weekend getaway.

Just make sure you give yourself time to save for a big purchase and it's still within your budget.