Salary hike is like a sibling you want. Everybody wants one. But no one’s happy with it. Whatever hike you got, if you do these simple things with it, we promise it will make you happy.
Did you really get a salary hike?
Never measure your salary hike in percentage. Always ask for a salary structure. Check what component of salary has increased and what are the tax implications. If your take home is coming to the same amount, ask the HR to restructure your salary to cut down on the taxes.
We are not suggesting you shouldn’t have fun with the hike. You should for the initial 2 months. Once you’re done shopping, eating out and holidaying, we suggest you invest 50% of your hike amount in Mutual Funds. For instance, if your salary has increased by Rs.20,000, keep Rs.10,000 for fun, and start an SIP for other Rs.10,000. If you invest Rs.20,000 every month for 15 years and keep bumping up your investments every year, you will probably have more than a crore savings.
EMI’s are your enemies.
You end up paying 20% interest pa if you took a personal loan and 40-45% if you took it against credit card. Try repaying your loans. Ask them to increase your EMI’s, so you can pay it all quicker and save interest.
Build Emergency Funds
Don’t treat your investments as emergency funds. If you withdraw money when the markets are bad, you will end up making losses. It’s important to save some money for any emergencies in life.
Donate more for a cause and earn good karma. But this time, Karma will give you money. Because you are eligible for deductions up to 10% of the donors adjusted income.
Probably, the most important of it all. Go have dinner with your friends. Buy your dream bike or go on a holiday.
We believe if you think a little more about how to handle your salary hike and your siblings, you will always be happy with what you have.
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*Mutual fund investments are subject to market risks, read all scheme related documents carefully.