I am a teacher and so don’t get raises the same way people in the private sector do. I don’t receive merit raises but do get step raises. This year I am not moving over a step, so was not expecting any kind of raise. However, California gave a hefty (but still below the rate of inflation) COLA raise to school districts of 6.56%. For the first time in my entire career, our school district is giving us the entire COLA plus a tiny bit extra. With the step I’m at, this should make for a take home difference of $4000 for the year, or around $335 per month – a decent increase after taxes!
The union also negotiated a one-time lump sum payment equal to 6.5% of my yearly salary. After taxes, I’m expecting to net right around $4000. I have not yet decided how this is going to be spent. I would love to throw the entire balance towards credit card debt, but with some of the spending we had to do this summer, our savings account took a hit.
My comfort zone is at two months’ worth of bare bones expenses in our emergency fund. Currently, we only have one month of expenses. $4000 would almost replenish our emergency fund. Plus as we won’t get the money for a several weeks up to a couple of months, that money coupled with what I would contribute to savings, would top off our emergency fund.
I could also split it up and send half to the emergency fund and half to debt. Clearly, I’m torn. I guess the bonus is that we are going to be getting the money and that I have options!