How to keep track of your increments
Salary hike should ideally translate into a bigger investible surplus. Fill in this three-step worksheet to know where your increment is being spent and how to use it judiciously.
By Shobhana Chadha, ET Bureau | Updated:
A salary hike should ideally translate into a bigger investible surplus. For most people, however, the increase is not significant, remains stagnant, or even falls. While overspending is typically to blame, keeping track of the increased funds can help you use these optimally. Fill in this three-step worksheet to know where your increment is being spent and how to use it judiciously.
STEP 1: CASH FLOW BEFORE HIKE
Make a comprehensive cash flow statement, separating your inflationary and noninflationary expenses. Consider Mr X’s cash flow to help you understand the process.
STEP 1: CASH FLOW BEFORE HIKE
Make a comprehensive cash flow statement, separating your inflationary and noninflationary expenses. Consider Mr X’s cash flow to help you understand the process.
STEP 2 : CASH FLOW AFTER HIKE
Analyse the impact of increment and inflation on your inflow and outflow, respectively, to build the new cash flow statement. Practise budgeting in this step and be prudent while accounting for the increase in outflow.
Analyse the impact of increment and inflation on your inflow and outflow, respectively, to build the new cash flow statement. Practise budgeting in this step and be prudent while accounting for the increase in outflow.
STEP 3
Compare the increase in income with the ideal increase in expenditure to know about the appropriate savings. If there are any discrepancies between the ideal scenario and reality, look for reasons and make immediate rectifications wherever possible.
Compare the increase in income with the ideal increase in expenditure to know about the appropriate savings. If there are any discrepancies between the ideal scenario and reality, look for reasons and make immediate rectifications wherever possible.
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