The liquor store doesn’t pay me much. $13/hour is only $26,000/year full-time. Luckily, that gig isn’t my main source of income. No one ever needs a wedding photographer on a Monday though, so I figured I may as well make some extra money on my weekdays.
I got a small $1 raise three months into that job. Starting on September 1, I’ll be banking that raise. I started that job at $12/hour and lived just fine, so I’m dumping that extra $1/hour into my investments. You can bank your raise too. It’s easy: Just compare how much you currently make per hour to what you started at, then multiply the difference by the hours on your paystubs. Throw that into investments ASAP. Here’s some math on how much you’ll save.
On my last paystub, I worked roughly 47 hours over two weeks. If I bank my raise, that’s $47. I get about 25 pay periods per year. That’s setting aside an extra $1,175/year, and that’s at the low end! What if you’ve had a full-time job for years and your raises add up to more like $5? That’s investing $10,000/year into your future! If you have a $50,000 income, that’s about what you’d need to max out your RRSP! If you make banking your raise automatic, and literally use just that step alone, your retirement will become automatic too! Even my paltry $47 per pay period adds up to $43,475 by 65 – AND THAT’S IF I DON’T INVEST IT. Invested the way I normally do, I’m looking at $200,000 JUST BY BANKING MY $1 RAISE.
As usual, run your own numbers. I’m just here to remind you financial security is easy. This is such a simple way to compartmentalize your savings, and mentally set aside money.
You lived perfectly fine when you started your job. Anything extra is just icing on the cake.