Lesson 19
The Annual Money Review
Follow one pay rise through the whole plan: what it’s really worth, what a rent rise takes, and where the rest should go first.
One change, the whole plan
Sam is 31 and rents a flat in Leeds. In April, Sam’s salary rises from £48,000 to £53,000. From 1 May the rent goes up by £50 a month. Sam owes £2,400 on a card at 24%, keeps a £1,500 reserve against essential costs of £1,600 a month, repays a Plan 2 student loan, and pays 3% of salary into a workplace pension that the employer matches up to 5%.
A pay rise is the best moment to look at everything at once. The new money hasn’t been spent yet, so Sam gets to decide where it goes before it quietly drifts into everyday spending, the creep the drawing shows. By the end, Sam should have a decision that can be explained in a sentence, not a checklist.
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