Question

Selena has been working at her first post-college job for almost a year when her company gives her a well deserved raise, resulting in a paycheck increase of $350 (after taxes), for a total of $700 extra in take-home pay every month. She makes a quick list of possible ways to use that money, along with relevant notes for each.

Answer 1

Here are some possible ways Selena could use the extra $700 in take-home pay:

1) Save for emergencies: Selena could set aside some of the extra money in a savings account to use in case of emergencies, such as unexpected car repairs or medical bills. This can help her feel more financially secure and prepared for the future.

2) Pay off debt: Selena could use the extra money to pay off any outstanding debts, such as credit card balances or student loans. This could help her reduce her monthly expenses and improve her credit score.

3) Invest in retirement: Selena could consider using some of the extra money to invest in a retirement account, such as a 401(k) or IRA. This can help her save for the future and potentially earn more money through compound interest over time.

4) Save for a big purchase: Selena could set aside some of the extra money to save up for a specific purchase, such as a down payment on a house or a new car.

5) Treat herself: Selena could use some of the extra money to treat herself to something she's been wanting, such as a vacation or a new piece of technology. This can help her feel more rewarded and motivated.

6) Donate to charity: Selena could choose to donate some of the extra money to a charitable organization or cause that is important to her. This can help her give back and make a positive impact on the world.