Don’t let your next salary increase vanish into thin air

Do you work hard for a salary increase, only to find your money runs out just as quickly? Lifestyle creep can absorb extra income before you even notice. Building real financial breathing room starts with how you treat “new” money – not how much of it you get.  

Apply the 50% rule 

Before the money even hits your account, decide how it will be split. Instead of using your entire increase to upgrade your lifestyle, commit to saving half and spending the other half. For a R1,000 increase, this means R500 goes towards your future, the other R500 to your daily life. 

Hide your extra income 

No, not under the bed – but out of sight. Set up a recurring debit order that moves part of your increase into a separate account or a tax-free savings account as soon as you’re paid. Automating it removes temptation and keeps your budget in check.  

Crush your smallest debt 

If you’ve got a credit card or a store account, the biggest savings come from paying early, skipping the added interest. Redirect extra monthly cash towards your smallest debt. Even an extra R300 on your minimum instalment can reduce the total interest you owe and help you get out of debt faster. For more tips, read “Plug your debt leak”. 

Check your retirement contribution 

Since your retirement annuity contributions are tax-deductible, upping them when you get an increase actually lowers the amount of tax you pay. It’s one of the few ways to keep more of your increase while simultaneously preparing for your future. Even a tiny increase now can make a massive difference in your retirement.  

OUR MONEY COACH PRO-TIP  

A salary increase only makes you wealthier if you protect a portion of it from your own impulse spending – think about tomorrow, not just today.  

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