For many workers, the start of a new year is often a time for performance reviews and planning discussions with their managers. For some, it’s also an opportunity to negotiate pay, and research suggests that the odds are in workers’ favor this year. The Conference Board projects that companies are budgeting a 3.9% increase for wages in 2022, the largest increase since 2008.

When most people see a shiny new number in their bank account, they start thinking about ways to spend the extra cash. It’s great to treat yourself now to a little something special, but don’t forget about your long-term goals. If you recently earned a raise or you’re expecting one, take a look at your whole financial picture and make sure to tackle some of the essentials as part of your plan. Not sure what to do, or what comes next? Here are some suggestions.

Don’t leave money on the table  

If your company’s 401(k) offers a matching contribution, focus on putting enough in the plan to get that full match. This is one of the best deals you’ll ever find and that’s why it’s your first priority.

Pay down high-interest debt

If you’re not on top of your credit card payments, you could be spending a lot of your budget on interest each year. A salary boost is an opportunity to help pay down that debt. If you have more than one card, start with the one with the highest interest rate and work to increase your monthly payments on that one until your balance is zero. Then move on to the next card. And of course, always be sure to pay the minimums due each month on all debt to avoid any penalties.

Save for emergencies

Accidents, home repairs, and other unforeseen expenses are stressful, but you can take steps to prepare. Dedicating part of your salary to saving for emergencies can put you in a much better position to face the unexpected. One rule of thumb for your emergency fund is to aim for an amount that covers a few months’ worth of living expenses. That may sound like a daunting number, but start small and do it through direct deposit right from your paycheck. This can help you avoid borrowing or tapping retirement funds to pay for financial surprises.

Keep saving

The IRS sets an annual limit for how much you can save in your 401(k) plan. The maximum for 2022 is $20,500, up $1,000 from last year and $27,000 if you’re 50 or older. If you’re saving less than that, consider increasing your retirement savings rate, even if you’re already getting the full employer match. Bumping your savings rate up one or two percentage points can make a big difference in the size of your nest egg over time. If you’re able to hit the annual contribution limit and can afford to save even more, consider funding an individual retirement account (IRA) or health savings account (HSA) to continue working toward your long-term goals.

Everyone’s priorities are different, so assess your full financial situation and take actions that best align with your plan. Learn more about these steps and other savings considerations here.

Schwab Savings Fundamentals™ are provided by Charles Schwab & Co., Inc.

The information provided is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends that you consult with a qualified tax advisor, CPA, financial planner, or investment manager.

Workplace Financial Services is a business enterprise which offers products and services through Schwab Retirement Plan Services, Inc.; Schwab Stock Plan Services; and Compliance Solutions. Schwab Retirement Plan Services, Inc., provides recordkeeping and related services with respect to retirement plans. Schwab Stock Plan Services is a division of Charles Schwab & Co., Inc. providing equity compensation plan services and brokerage solutions for corporate clients. Compliance Solutions is comprised of Schwab Designated Brokerage Services (DBS), a division of Charles Schwab & Co., Inc., and Schwab Compliance Technologies, Inc. (SchwabCT). DBS provides brokerage solutions for corporate clients who monitor their employees’ securities activity. SchwabCT provides technology solutions for corporate clients to help facilitate their compliance technology program implementation. Schwab Retirement Plan Services, Inc., Schwab Compliance Technologies, Inc., and Charles Schwab & Co., Inc. (Member SIPC, are separate but affiliated entities, and each is a subsidiary of The Charles Schwab Corporation.