What Would You do With an Increase in Cash Flow?

cash flow

What would you do with an increase in cash flow? I recently wrote an article about receiving a promotion and the increased pay that came with it. It’s been a couple of weeks, and I’ve received my first paycheck at my new pay rate. It is as expected, and I am following my budgeting strategy with the money. How would you handle a sudden pay bump?


My strategy is simple. For the time being, I am saving all my pay increases in my savings account. I haven’t increased my standard of living or made any major purchases. My goal is to remain debt free and keep building savings.

I have also been working a part-time job, and all the money I make working there has also been going into my savings account. In all, I’m in a position where I can comfortably save around $1500 a month in cash.


I decided that for now, I am going to keep my contributions to the markets where they have been. There is already a large amount going into stocks every month, so I can afford to leave those investments alone and focus on building cash reserves.

With market turbulence the way it is, I can take comfort in not going all in right now. Siding on the sidelines with some cash could benefit me later.


Generally speaking, an increase in cash flow means you have more money to manage.  And, all things being equal, more education can help you better manage your increased cash flow.  A good place to start is by reading personal finance blogs.  And you should probably pick up a basic personal finance text such as Personal Finance For Dummies (Get the one from Erik Tyson).  It would also make sense to invest time into a Udemy course or spend some quality time with a free resource like the Khan Academy.


Admittedly, I am taking an extreme approach by saving all my new income. I am certainly not opposed to enjoying the money that you work so hard for. I just want to stick to my plan for now. Once I have enough cash saved, then I will probably start to deploy some of it into the markets, into some necessary purchases, and finally into some wants.

Wrapping Up

What would you do with an increase in cash flow? The temptation can be great to increase your standard of living with it. There is nothing wrong with that, but many people make the mistake of spending every new dollar that comes in. Having a financial strategy and sticking to it are the keys to making sure a pay increase is managed properly.

Read Also:

I Got a Promotion Last Week

Picking Up a Part Time Job

Three Smart Moves to Make After Receiving Your First Paycheck

7 High-Paying Jobs That Will Help You Save Money

P.s. If you have a few spare moments, consider reading Investor Dash’s latest on procrastination.   Because, whatever you do, don’t wait.