Friday, 31 Oct 2025
  • Contact
  • Privacy Policy
  • Terms & Conditions
  • DMCA
logo logo
  • World
  • Politics
  • Crime
  • Economy
  • Tech & Science
  • Sports
  • Entertainment
  • More
    • Education
    • Celebrities
    • Culture and Arts
    • Environment
    • Health and Wellness
    • Lifestyle
  • 🔥
  • Trump
  • VIDEO
  • House
  • White
  • ScienceAlert
  • Trumps
  • Watch
  • man
  • Health
  • Season
Font ResizerAa
American FocusAmerican Focus
Search
  • World
  • Politics
  • Crime
  • Economy
  • Tech & Science
  • Sports
  • Entertainment
  • More
    • Education
    • Celebrities
    • Culture and Arts
    • Environment
    • Health and Wellness
    • Lifestyle
Follow US
© 2024 americanfocus.online – All Rights Reserved.
American Focus > Blog > Economy > What To Do with a Salary Bump: Invest, Save, or Spend?
Economy

What To Do with a Salary Bump: Invest, Save, or Spend?

Last updated: May 25, 2025 12:05 pm
Share
What To Do with a Salary Bump: Invest, Save, or Spend?
SHARE

If you’ve recently received a salary bump, congratulations! An increasing salary is one of the keys to long-term financial success. But what you do with that extra income plays an important role as well.

You have three basic choices on how you can use any extra money in your paycheck: invest it, save it, or spend it.

Investing means using money to buy an asset in the anticipation that it will generate income and/or an increase in value over time. If you’re looking to build wealth, investing is your best option.

The S&P 500 stock market index, for example, has a long-term average return of about 10% per year. Thanks to the power of compound interest, that’s enough to double your money every seven years or so.

One trick many financial advisors recommend for building long-term wealth is to invest any “found” money. This includes any type of money that’s not part of your monthly budget. Since you were already (hopefully) spending less than you earn, it means that you should be able to get by without spending the salary increase.

If you’re looking to boost your long-term nest egg, investing is the best choice. Savings accounts can’t keep up with the return of the stock market, and spending subtracts from wealth, rather than building it.

While long-term investing can net the highest returns, sometimes the best place to put a salary increase is in a savings account.

When your money is in a savings account, it’s instantly accessible via a debit and/or ATM card, giving peace of mind in case you have any financial emergencies. Thanks to the explosive growth in online, high-yield savings accounts, you can likely find plenty of suitable options for your money.

See also  One of Earth’s most vital carbon sinks is faltering. Can we save it?

The final option is to spend the extra money that you’re earning. While this isn’t a good choice if you’re looking to build long-term wealth or preserve your capital, there are some scenarios in which it can make sense.

If you’re “spending” the money to pay down high-rate credit card debt, for example, that can be a smart move. There’s also a case to be made for catching up on important expenses you have been delaying, such as driving a safe vehicle or maintaining your home properly.

But if you’re just planning to blow the money on discretionary items, you’re giving in to what experts call “lifestyle creep,” in which you continue to spend your money as fast as you earn it, even when your income increases. Over the long run, that’s the path to the poorhouse.

In conclusion, whether you choose to invest, save, or spend your salary increase, it’s important to make a conscious decision that aligns with your long-term financial goals. Each option has its pros and cons, so consider your priorities and make a choice that will set you up for financial success in the future.

TAGGED:BumpInvestSalarysavespend
Share This Article
Twitter Email Copy Link Print
Previous Article At West Point, President Trump Lauds the “Future Leaders of America’s Army” – The White House At West Point, President Trump Lauds the “Future Leaders of America’s Army” – The White House
Next Article Man hospitalized after attack at Division Blue Line station Man hospitalized after attack at Division Blue Line station
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Popular Posts

Trump Has A Middle-Of-The-Night Meltdown At Ex-GOP Official

President Donald Trump took to Truth Social in the early hours of Friday morning to…

August 8, 2025

What happens when you drink and don’t know you’re pregnant?

Credit: Pixabay/CC0 Public Domain A recent study conducted by researchers at Université de Montréal has…

October 12, 2024

Scientists Reveal How a Deadly Insect Manipulates Its Prey : ScienceAlert

Insects are often underestimated when it comes to their intelligence and abilities. A recent discovery…

May 12, 2025

Leslie Jones Names Her Big Problem With Top Trump Folks, And It May Be Unexpected

Actress and comedian Leslie Jones made a fiery return to “The Daily Show” on Wednesday,…

May 16, 2025

Lines, Legalism, Limits, and Likeness

In today’s discussion, we delve deeper into ideas inspired by Barry Lam’s thought-provoking book, Fewer…

June 13, 2025

You Might Also Like

Verizon Communications Stock: Analyst Estimates & Ratings
Economy

Verizon Communications Stock: Analyst Estimates & Ratings

October 31, 2025
BTIG Remains Positive on NextEra Energy (NEE), Highlighting its “Premier Generation Development Platform”
Economy

BTIG Remains Positive on NextEra Energy (NEE), Highlighting its “Premier Generation Development Platform”

October 31, 2025
3 Must-Buy Stocks Fueling the Data Center Surge
Economy

3 Must-Buy Stocks Fueling the Data Center Surge

October 31, 2025
Shake Shack returns to profit in Q3 2025
Economy

Shake Shack returns to profit in Q3 2025

October 31, 2025
logo logo
Facebook Twitter Youtube

About US


Explore global affairs, political insights, and linguistic origins. Stay informed with our comprehensive coverage of world news, politics, and Lifestyle.

Top Categories
  • Crime
  • Environment
  • Sports
  • Tech and Science
Usefull Links
  • Contact
  • Privacy Policy
  • Terms & Conditions
  • DMCA

© 2024 americanfocus.online –  All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?