9 Smart Moves to Make After Getting a Raise or Promotion

By Dan Rafter on 26 April 2018 0 comments

You've worked hard, and you've impressed the boss: You've been rewarded with a raise, promotion, or both. That's great news.

The worst mistake you could make right now is to use this time as an excuse to slack off at work or spend more money. Your new challenge is to figure out how to handle your new responsibilities and your new money in a way that will help you continue to succeed.

Here are some smart career and money moves to make after your employer rewards you with a raise or promotion.

After a promotion

Getting a promotion is a sign that you've been a hardworking, valuable employee. You should pat yourself on the back for your achievement.

But, promotions can also prove stressful. You may be managing people for the first time, or maybe you'll be taking on more responsibilities. Regardless, there are a few key things you should do immediately following a promotion. (See also: 9 Signs You're Making All the Right Career Moves)

1. Be confident, but humble

There's a reason you earned that promotion. There's something that your employer values about you, your decision-making, and your leadership. It's great to feel confident, but don't let this make you cocky.

You still have a lot to learn after a promotion. You'll be taking on new duties. Your job description might have swelled. You might even be overseeing others for the first time. Remain humble, grateful, and don't alienate your peers. It's harder to reach your new goals if your co-workers don't like you.

2. Ask plenty of questions

Questions are your friend after a promotion. You want to make sure that you understand all that is required of you in your new position. If you have any doubts or confusion on this matter, get concrete expectations and instructions from your superiors.

You also want to come up with as many good ideas for improving your company's performance as you can get. Ask your co-workers — even if you are now managing them — for their input on what steps the company can take to improve morale, boost productivity, and compete more successfully in the marketplace.

3. Get ready to work hard

You'll want to reassure your boss that they made the right decision when they promoted you, so put in the hours necessary to show them how dedicated you are to your company. Now is not the time to take extra days off or leave the office early. Instead, work even harder than you did before you earned your promotion.

Take the initiative at the next company meeting. Research what new skills would help you thrive in your role, and make a plan to learn them. Not only will this impress your boss, it will help you catch up more quickly with your new duties and responsibilities.

4. Start churning out the ideas

Does worker productivity at your office slump after lunch? Is employee morale low? Is a big project behind schedule? Come up with potential solutions to these problems. Crafting new ideas to solve important problems is the best way to show your supervisors that they were right in giving you that promotion.

After getting a raise

A promotion doesn't always come with a big pay boost, but if it does, it's the perfect reason to give your finances a makeover. (See also: 8 Money Moves to Make the Moment You Get a Promotion)

5. Calculate exactly how much more you'll be getting each month

It's tempting to start spending your raise before it even shows up in your paycheck, but be careful: Taxes and other withholdings will eat up a portion of your raise before it even hits your bank account. Getting a $3,000 raise does not mean there will be exactly $3,000 extra dollars in your pocket at the end of the year. Wait until your salary increase is reflected in one of your paychecks before changing your saving or spending patterns. That extra chunk of change might not be as large you originally expected. (See also: Are You Withholding the Right Amount of Taxes from Your Paycheck?)

6. Rework your household budget

Once you know exactly how much extra money you'll get with each paycheck, it's time to tweak your household budget. Your expenses should remain the same — lifestyle creep is a dangerous thing — but your monthly income, obviously, will change. What should also change? How much money you contribute each month to retirement and savings. Rework that budget to help you determine your new savings goals. (See also: How to Budget When You're No Longer Broke)

7. Boost your retirement savings

It's fun to imagine using your new funds to buy a high-end laptop, flat-screen TV, or shiny new car. While no one can stop you from buying those things, make sure to first use your extra funds to boost your retirement savings. Building a retirement nest egg should be your ultimate goal starting your very first day of work. That might not seem like a whole lot fun now, but you'll be thankful for the foresight as retirement grows closer. (See also: 6 Ways Meeting the 2018 401(k) Contribution Limits Will Brighten Your Future)

8. Build your emergency fund

You should always have an emergency fund of savings that you can tap to cover unexpected expenses — whether it's a big vet bill for your dog or a blown gasket in your car. Having such a fund makes it less likely that you'll need to turn to credit cards to pay for an emergency.

Financial experts recommend that your emergency fund have enough dollars in it to cover your daily living expenses for six to 12 months. If your fund isn't stocked to this level, use the extra money from your raise to hit that target. (See also: 7 Easy Ways to Build an Emergency Fund From $0)

9. Continue to live frugally

Too often, people boost their monthly spending as their income rises. They spend more on cars, clothing, entertainment, and meals. The problem is this lifestyle creep can quickly erase any added savings that come with a larger paycheck.

Resist the temptation to overspend after earning a raise. Instead, focus on the less fun but more important task of building your savings, emergency fund, and retirement accounts. After getting a raise, don't spend more. Save more. (See also: How One Nice Thing Can Ruin Your Whole Budget)

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