We all want to make more money at work, and new data tells us that employees across the board might have something to smile about come 2019. That's because U.S. employers are projecting larger pay increases for workers than usual next year, according to data from Willis Towers Watson. The average exempt, nonmanagement professional could see a raise of 3.1% in 2019, compared to 3% this year. Nonexempt hourly employees can also anticipate a more generous boost -- 3% in 2019 versus 2.9% this year.
Of course, whether or not you snag a raise will depend on a number of factors, such as how well your company does and the extent to which you meet or exceed expectations on the job. But if revenue seems solid at your company and you know your performance is on point, there's a good chance you'll see a substantially higher paycheck next year. And if that's the case, here are a few ways to use it to your advantage.
1. Build or boost your emergency fund
It's estimated that 23% of Americans have no emergency savings whatsoever. If you're one of them, or have some money in the bank but not a lot, then getting a raise gives you a perfect opportunity to start building some cash reserves. You never know when your roof might cave in, your car might break down, or your company might get bought out and start laying people off. Unfortunately, these things just happen, but the best way to protect yourself from those financial what-ifs is to have a decent chunk of money in the bank. Ideally, your emergency stash should suffice in covering about six months' worth of living expenses, so if you're nowhere close and get a raise, you know where that extra money should go.
2. Increase your retirement savings
If you're fairly young and are decades away from leaving the workforce, retirement might be the last thing on your mind. But the sooner you start putting money aside for the future, the more opportunity you'll have to invest it and grow it into a larger sum. So if you happen upon a sizable salary increase next year and are doing well with emergency savings, it pays to allocate your raise to retirement. If your company offers a 401(k), the easier thing to do is increase the percentage you're contributing and have that money deducted automatically. If you're saving in an IRA, you may need to take some extra steps to get money in there, though some IRA providers will let you set up automatic transfers that make the process seamless.
3. Pay down debt
Countless Americans are drowning in debt, whether it's of the credit card or educational variety. If your paycheck gets a nice boost next year, why not use that cash to knock out the loans that are currently hanging over your head? Doing so will not only save you money, but help alleviate the stress that comes with walking around saddled with debt.
4. Invest in your own career growth
If there's something specific preventing you from taking your career in the direction you want it to go, like a certain skill or certification, your pay bump could be your ticket to eventual growth. So if you do wind up with extra money in your paychecks next year, you'd be wise to spend it on yourself. Sign up for that course you've been meaning to take, or pay for a couple of sessions with a career counselor if you feel you need guidance or direction. We spend so much of our lives working that investing in your professional happiness is more than worthwhile.
Will your paycheck give you a reason to celebrate in 2019? It just might, so go in knowing what to do with it. While the raise outlook seems positive for the upcoming year, there's no telling what the following year might have in store, so you might as well make the most of that extra money while you can.
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