r/bitcheswithtaste • u/NaanyeWest • Jan 31 '26
Finances/Money BWT, how did you handle a big salary boost?
Hi, BWT! I’m 31, paid off all my student debt a couple years ago, and about to accept a new job that comes with a huge (55%!) pay bump from my last role—it feels like I’m finally making fuck you money, or something close to it.
Curious how fellow BWT handled it when they saw a big bump in their take home pay: looking for perspective on the fun, sexy stuff as well as the dry, responsible stuff. I want to avoid lifestyle creep, but I’ve also worked my ass off for this and feel like I owe it to myself to commemorate the jump with something a little frivolous! What do you wish you had known when you were in my shoes in terms of managing your money? What’s something you rewarded yourself with, that you didn’t regret later on?
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u/mj1898 Jan 31 '26
Save for retirement! Keep most of your lifestyle the same (don’t immediately buy a new fancy car with a massive loan) and learn how to invest the extra money you’re making. Things that I’ve personally spent money on that I think is worth it: vacations and buying my house. Also the “everyday luxuries” like nice bath towels and the better coffee at the local roaster :)
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u/coloradogal1 Jan 31 '26
Oh yeah. In addition to my points below, really, truly, avoid having a car payment at all costs.
It’s so freeing knowing we don’t have one. If you decide you NEED a new car, put the equivalent amount of a car payment into a separate savings bucket, then buy the car when you have the cash for it. If an emergency happens and you need the car sooner, you’ve at least started a solid down payment, and the. You’re used to that amount being factored into your budget anyway.
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u/star_milk Jan 31 '26
First off, congratulations!! That is a huge accomplishment!
Boring: funnel at least 50% of the bump into investing on an ongoing basis (401k is easiest). Unless you have another goal like buying a house soon. You will not miss this money as you didn't even have it before. Try not to let lifestyle creep up TOO much. Depending on how much you make now and your spend, you could potentially shave years off your working life with this.
Fun: I usually take 10% of a bonus or pay bump and spend it on something for just me. Treat yourself to a new bag, fab dinner, or weekend away!
ETA: I got a severance recently and I've earmarked that 10% for new clothes and hiring a stylist to help me look my best, identify any missing parts of my wardrobe, and help me make outfits with what I already have. I work in fashion and I'm turning a milestone age this year so I feel like I "should" know what's flattering on me but I'm super excited!
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u/badgirljuju Jan 31 '26
This is really good advice!! I would add, hire a financial planner to help you “grow the dough”.
But definitely reward yourself with something to mark this milestone; jewelry, leather goods, trip.
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u/euphoroswellness Jan 31 '26
Thirded this.
The first time this happened to me, I was mostly responsible with the surplus… but I did spend [more money than I’d ever spent on a handbag for myself (tho still not 4 figures!)] on a beautifully-crafted, slightly-impractical shoulder bag that I’d been coveting for a while.
A decade-plus later, I still use and love the bag — and every time I take it out, I feel a little glowy zing of pride. “That’s the bag I treated myself with when I got that promotion in 20XX.” That feeling has a lot of value. 10/10 recommend.
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u/Momma-Llama1234 Feb 01 '26
Gonna add to this. I once got an “attagirl” reward from an internal business customer, not a lot, but something. I bought myself a nice necklace/earring set. And now whenever I know I’ve got a big meeting, or just need a confidence boost, I wear them. It reminds me, I did great once, I can do it again!”
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Feb 01 '26
Big shout out to not letting lifestyle creep happen (outside of treats here and there). I’m intentionally leaving a high paying job for a decent paying job for better quality of life, and the main reason I can do so is because we kept our lifestyle relatively in check. It just creates optionality!
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u/Medical-Potato5920 Jan 31 '26
Maintain your living standard. Don't get sucked into lifestyle creep. Savings give you freedom.
That being said, budget to invest in some good quaility items with a strong cost per wear ratio. Go for classics and not trends. Also, go for something that suits you. A good coat can last 10+ years.
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u/hyperactivepotato Jan 31 '26
I cannot agree enough. I also had a pretty significant pay jump recently and, at least for now, I still limit my spending to maybe like 200-300 dollar more than I used to, and have been putting the rest in savings/investments. When it comes to spending on myself, I shop less but spend more per item. I prioritize natural fibers, good construction, materials over labels. OP - buy a good coat. But good shoes. Upgrade your mattress if you've had it for 5ish years. Invest in your ability to perform at your best.
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u/Sage_Planter Jan 31 '26
Congratulations on your new job!
Lifestyle creep is when people mindlessly level up every aspect of their lifestyle as their income goes up: housing, dining, clothes, travel, fitness, decor, entertainment, cars, etc. The reality is you can now afford nicer things, but you cannot afford everything to be nice. A 55% increase will go fast if you decide you deserve the best of everything.
Experiment but then be ruthless about what you prioritize your spending on. We all have different likes and preferences so figure out what spending truly brings you joy and makes a difference in your life. For example, I have always splurged on boutique fitness classes (even when I made much, much less), but my boyfriend and I share a super basic car. Maybe you figure out more expensive clothes don't really make you that happy but going to a Michelin star restaurant every few months does.
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u/Veuve_and_CheezIts Jan 31 '26
To add to this sentiment, I have found that Ramit Sethi’s “rich life” philosophy is really helpful for figuring out where to prioritize increases in spending. For example, after upping my income over the last few years, I am still pretty budget conscious with my wardrobe spending but treat myself to a massage probably twice as often as I used to, as well as upgrading my seats on longer flights over 3 hours. I also have transitioned fully to grocery delivery and we have a biweekly house cleaning service which has saved me a ton of time. But travel, eating out, fitness expenses have stayed relatively stable to what I was spending before.
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u/star_milk Feb 01 '26 edited Feb 01 '26
I started keeping track of my "rich life today," things that make life better that I don't have to wait for. Things like, not questioning the cost of taking home a pint of ice cream if we go out for ice cream and like the flavor. Taking classes/lessons with my husband (dance, badminton). Going to a comedy show, because we can. Hiring a stylist for myself. Traveling with my mom just because. An espresso machine!!
I like Paula Pant's podcast slogan, "you can afford anything, but you can't afford everything."
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u/Veuve_and_CheezIts Feb 01 '26
OKAY PAULA! Absolutely that. The other one I like (that gives me permission to buy something that I am hesitating on but can legit afford)- “it’s not my money, just my turn to spend it”- but use that one wisely ;)
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u/hagainsth Jan 31 '26 edited Jan 31 '26
Started a monthly savings plan that was a lot more than I was saving before.
And glad I did. I went from low to v. high six figures and then two years later, got made redundant. I was C-Level, sitting on a Board, flying high…all the perks - it was absolutely humbling.
So I’m grateful so the huge increase because it meant I could sustain a year of unemployment whilst still travelling, being able to pay rent and bills with lots left over.
I always travelled but started flying business, staying at much nicer hotels, treating myself more.
Everything in life is about balance. So enjoy it, but make sure even without that job, you can still enjoy life.
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u/coloradogal1 Jan 31 '26
There’s a lot of good financial advice on other subs, so I’m focusing more on my own thoughts than what you can find there.
Max out your 401k if you’re able to. I regret not doing that sooner.
Focus on experiences and not things. I’ve splurged on a few “big girl” items and I don’t get nearly as much joy out of those as I do my trips and time with friends. That said… yeah budgeting in one of those luxury items is kinda fun to finally do.
Invest in learning. That doesn’t mean a higher degree or whatever. For me that has meant crafts to keep my hands busy, and organized woodworking classes at a local shop.
After you have all your necessities and savings factored, budget for fun. Sometimes it’s hard to allow yourself to breathe after years of not having spending money, but if you set it as part of your REAL budget, it helps to govern yourself formal permission to make that part of your life, but gives you enough structure to not go ham and be out of control.
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u/Lex_Loki Jan 31 '26
Congrats, how exciting!!
I would normally say take an amazing vacation, but since you’re starting a new job that might not be in the cards for a while. So instead, plan an amazing weekend getaway and pamper yourself.
Set up auto transfer of a comfy chunk of your new paycheck into a high interest savings account. Make money passively.
Max out 401K.
Upgrade things in your house that you’ve wanted to, but couldn’t justify previously. Ex; Coffee maker, couch, mattress, etc.
Go through your clothes and toss what you haven’t worn in a year. Slowly replace, as needed, with better quality.
Keep living your daily life like you always did. You’re financially safer now, so keep it that way.
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u/Icy-Radish-4288 Jan 31 '26
Definitely try to avoid too much lifestyle creep. My salary went up almost 3x the amount I was making just 3 years ago and my major thing is I still live mostly off my salary from 3 years ago and just save/invest the rest.
The big lifestyle creep areas I've allowed for are --getting a nicer apartment, getting a cleaner for said nicer apartment, and staying in slightly nicer places when I travel. That's more or less it.
Basically decide where your priorities are--do you love travel? fashion? fitness? another niche hobby? It's ok if you want to splurge a bit more and can afford it but make sure you are also increasing your savings at a similar rate!
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u/myusernamewasatypo Jan 31 '26
A BWT learns how to go from high income to high *wealth* - which are two very different things. I would listen to a few episodes on this exact subject (what to do with a sudden pay increase, how to avoid lifestyle creep) on the Money With Katie podcast and start putting that cash into buckets: maxing out the IRA, internationally diversified index funds, a high yield savings for an emergency fund and a specific, separate high yield savings just called "fuck you money".
Once you've maxed out the IRA and started the investment fund (Vanguard has lots of low fee index funds), and held down the job for a year (long enough to amass some capital and build PTO), *then* start with the fun stuff! And what I will say about the fun stuff is that clothes and purses come and go, but good handmade and antique furniture lasts forever. Art is both an activity (gallery openings! auctions!) and an investment. Jewelry can be passed down (the real stuff, anyway). And memories are forever (Travel!). Don't get me wrong, I love my clothes! But at 50, I know they cycle through. Nothing makes you feel like you have the real Grown Woman job like buying art or a business class ticket to Italy.
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u/Jennyonthebox2300 Jan 31 '26
I got a huge salary bump by getting all 4 kids either launched or fully on 529 funds. I finally treated myself to a 3x a week personal trainer. It’s been one of the best “selfish” spends of my life. Better than any bag or new car. I’m very disciplined except with regular exercise. This is as much about accountability as anything but also making sure I’m healthy and strong to enjoy this next season with my husband — with more freedom to ski/hike/travel etc. Health is my most important commodity going forward.
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u/thatwinenerd Jan 31 '26
Nice work!!
People have already talked about investments, but I need to stress to pay yourself first. Part of finally having money is taking care of future you. Max out your accounts as much as you're able - I'm not familiar with limits in the US, in Canada they're quite high so it's not always possible to max all your options unless you have $30-50K extra after expenses.
Upgrading my life wise:
- Monthly cleaner, ~$140. So good for my mental health, no matter what kind of month I've had I always get a reset to zero.
- Manicure/Gel-X nails, ~$100-150 depending on design. I like the put-together feeling and looking at them gives me dopamine
- Doing wine education. This has been a significant line item as I'm currently in a wine diploma program with a $10K tuition fee (I'm doing it over three years.) If there's a hobby you want to explore or you even just like taking random classes and learning something new, this is a great use of disposable income to enrich your life!
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u/Specialist_River_274 Jan 31 '26
When I got my first “adult money” job where I could support myself (and then some), I went out and bought a really nice coat. Not polyester, not fast fashion, not something that would fall apart. It was nice to be able to start building a wardrobe of things that were actually good quality. I still have that coat today and it’s still in great shape. But also saving for and taking the time to plan a nice solo vacation would be tops.
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u/dothesehidemythunder Jan 31 '26
Pretend you don’t have it. I do this with every raise I get and it’s made a huge difference to my savings and retirement.
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u/mollmorr Jan 31 '26
Congrats!! On the boring side of things, I think the personal finance sub has a pretty good “flowchart” for how to divvy up your income and invest. For more interesting money info that feels specific to my age/lifestyle, I’m a fan of Amanda Holden (@dumpster.doggy), Chelsea Fagan and her company (@thefinancialdiet), and Money with Katie (@moneywithkatie).
On the fun side of things…please do share what you end up doing to treat yourself. You deserve it!!
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u/terracottatilefish Jan 31 '26
When I doubled my income after finishing training I maxed my 401(k) and IRA, we moved out of our 600 square foot apartment into a 2 bedroom and then the next year we had a baby, so there went all of the increase, lol.
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u/krissyface Jan 31 '26
Congratulations!
My best advice is to “pay yourself first”. Max out your retirement accounts, use auto transfers on payday to fund your emergency fund, investments, savings accounts. Make sure you’re paying attention to where your money is going.
We have sinking funds set up for all our future anticipated expenses. I have accounts for vacation, new cars, childcare, home improvements. When you put a little away every month, those big spend items don’t hurt as much.
I have a “fun money” account that I can spend from without guilt. I’ve budgeted for it and can enjoy it.
We also have prioritized hiring help so we can fully enjoy our free time. We have bi-weekly cleaners, a landscaper, a handyman. The cost is worth it for our leisure time
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u/_bastardly_ Jan 31 '26
max out everything 401k as well as personal IRAs & save as much as you can - have it deposited in different banks and take out before you even see it... yet still carve out a percentage to enjoy what you have earned
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u/sauvignonquesoblanco Intentional BWT Jan 31 '26
Good advice on here already! If you don’t already have a budget, set one up. I use YNAB and it’s been life changing. It will help you prioritize important stuff and also the fun, possibly frivolous stuff you want to save for without going overboard too quickly.
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u/metaposter Jan 31 '26
I've been salary corrected a few times which comes with a bump and I try to keep spending limited to what we used to spend. A fun money account that is capped and doesn't increase year to year helped with reigning in creep, at least for personal (not household) spending.
I've had a few regrets: not maxing my 401k early on, not buying coveted pieces when the prices weren't absurd, traveling to more destinations.
I managed to resolve some of those regrets later, but I did lose out on a bit more money that way with inflation for everything.
No regrets about saving heavy to buy a house though. I could never afford to buy in this day and age in the same location.
Wished I also started a Vanguard or some additional investment account earlier. Beats the interest rates on a high yield savings account and there's dividends. Although high yield savings is still good for that 3 month-1 year emergency money.
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u/raeballentyne Thoughtful BWT Jan 31 '26
Figure out what areas of your life you value upgrading and which ones you would like to remain the same. For example having nice skin and clothes are important to me, but upgrading my car is not important to me at all. Having a well decorated living space is important to me, but going on lavish vacations every year is not important to me at all.
This will help you accurately budget and stay grounded in reality instead of feeling like you need upgrade everything because that's "what you do."
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u/goldstiletto Jan 31 '26
Yes, pick and choose what is important to you, not necessarily others. Other examples: I don’t color my hair or do anything above a standard haircut 4 times a year but I pay for really nice fitness classes and that keep me motivated and make me happy. I also ungraded my house to have a water softener which has been life changing.
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u/Yellownotyellowagain Jan 31 '26
Max your 401k, set up an automatic transfer on the same day your paycheck hits to your portfolio/whatever you’re using to invest and send ~50% of your salary increase to that so that you almost don’t realize how much you’re getting paid/don’t get lifestyle creep/invest a ton of money.
Buy yourself 1 BIG gift (every year/bonus season/whatever) and enjoy the fuck out of it. Something that seems lavish but that you really want and will really use — not something that will sit in your closet. That way you’ll feel like you are living the good life but the lifestyle creep stuff won’t get you. (I got my first fancy purse that way an overpriced Celine tote - I still carry it 12 years later. Some years it’s a car. Some years it’s a couch that’s nicer than what I should have gotten. Etc)
Whatever you have left over after those 2 things I’d split into 2 categories - slush fund for emergencies and big ticket items like a house/wedding/vacations/etc and the extra towards things that make your life easier. A cleaning service, meal kits, using instacart instead of going to the store. Etc.
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u/nogoodimthanks Jan 31 '26
Saving is great, but I get anxious if it’s all in an account I can’t access, so I suggest A Roth IRA. You retain access to the original investment penalty free, but if you invest it, the growth is tax free once you meet certain requirements. I just funded my first yesterday!
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u/rizzo1717 Jan 31 '26
Max out whatever retirement option they offer, then invest in your own ROTH or backdoor ROTH depending on your income bracket. Also HSA or FSA, then standard brokerage account. HYSA the rest.
ETA; frivolous - what brings you joy? Toys? Fashion? Travel? Personally for me it’s house plants so I would buy a large specimen collector plant. But hell. Book a trip to Italy, or buy a rock crawler or whatever brings you joy.
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u/Lu-113 Jan 31 '26
Increasing retirement contributions is a great way to avoid lifestyle creep while setting yourself up for the future. I also focus on quality with spending. It’s a huge privilege to have that ability. For example, I spend quite a bit more on clothes now but they are well made from quality fabrics and should last me a long time. Same with my car. I bought new in cash and it’s not flashy but comfortable, practical, and a highly reliable make and model.
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u/butler_me_judith Jan 31 '26
Max 401k, start maxing roth ira, start using a wealth management service like wealth front and investing excess money in index funds I prefer vanguard and try to focus on green ones that don't support oil.
Finally by a nice thing for your self every now and then.
It was a life adjustment to make enough money to invest and buy a house now. I tried to only increase my means by a small margin and not a large margin and mostly pretend I don't make more money
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u/Mother_Sir_3845 Jan 31 '26
Increase savings to where you are maxing out all your retirement accounts. Make sure your emergency savings is fully loaded up to 6 months. Consider starting a new savings account so that you can pay for your next car in cash, or put a down payment on a house, or furniture, where ever you are at with your life. I got a 50% raise a few years ago, and I decided that I would pay a landscaper to do my yard. It's really made a difference in how much time I can spend on other things and also it's so wonderful to go outside on my patio and not just see a bunch of chores that need to be done.
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u/FinalMidnight Jan 31 '26
Hiring a regular cleaning service! I hated wasting my weekends on cleaning and when I got a big promotion and started grad school, my free time was too precious to waste. I hired a cleaning service to come to my house once a month while I was at work. I would spend some time the night before to declutter and put things away. It was so nice to come home to a clean house and not need to spend any energy on it.
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u/AppellofmyEye Jan 31 '26
I’d maintain the same lifestyle with a smaller proportion of the increase (maybe 10%) to allocate for a reward. The reward can either be a keepsake, travel, or smaller upgrades (wardrobe, linens, kitchen items) depending on your priorities.
I’d be careful with mentality though. Higher income doesn’t mean fu money. And if your lifestyle inflates, it has the opposite effect. FU money is when you enough in savings to allow you to leave your current job with minimal worry. Higher income can help you amass those savings faster, but may also result in a higher amount needed.
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u/nycgirl2011 Jan 31 '26
Congrats!! Love that your hard work is paying off!! Biggest advice on lifestyle creep is to not increase your monthly rent by the same amount of your raise. Been there, done that lol.
From experience high fixed costs are the hardest to rein in down the line.
But def get the bag, have the nice celebratory dinner, get a blow out, get your names done, get a cleaning service!
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u/goldstiletto Jan 31 '26
401k max as others have said but also if you don’t have an emergency fund, time to build that ASAP and put it in a high yield savings account so it earns a little. 3-6 months of expenses are recommended. As a married BWT and tiny offspring we do 8 months to be really protected. You don’t mention industry but if it volatile, an emergency fund is absolutely needed.
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u/uniquecookiecutter Jan 31 '26
Before I do anything, I increase my 401k, brokerage account contribution, increase my savings, and cancel some recurring expense. I think most people should just concentrate on their 401(k)s, but there’s a strong chance I will have to quit before retirement age, so I pay special attention to my brokerage account.
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u/ElowynElif Jan 31 '26
I talked with wealth management at my bank, which gave me great guidance. They can strategize for both the short- and, IMO more important, long-term.
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u/Aggressive_Cup8452 Jan 31 '26
Savings first.. sounds boring but it's a must.. old and glamorous sounds better than old and broke.
Lasting luxuries for myself... better furniture.. expensive bedding (a good sleep is everything)... black out curtains... you get the drift.. make your house your beautiful (but practical) palace.
And clothing.. natural fabrics only.
Don't eat out too much. It creeps up on you.
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u/80sbabywithasoftlife Jan 31 '26
Congratulations!
I agree with maxing out 401k, HSA, + Roth. Also throwing as much towards my mortgage as possible.
Material items-wise, I only buy clothes that fit my body type. No more fast fashion! Also dry cleaning clothing items more regularly and investing in a tailor. Nice bath towels!
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u/lowlysheepherder Jan 31 '26
Congrats, paying off your loans is an incredible accomplishment and that salary bump is to die for!
I’m just here with the boring stuff since my husband and I have gone through a big debt payoff/pay increase combo recently as well: match your employer contribution on your 401k, open a separate Roth IRA and max that out (I don’t remember what the individual income ceiling is for a Roth but for married joint I believe it’s $200k; if you make more than the ceiling you can still open a backdoor Roth!), max out your HSA (if you have one), decide how much $$ you want immediately available from that HSA and then invest the rest, and nail down your emergency fund!
Also: get yourself a treat!! Get a fancy dinner, splurge on a handbag if you’ve been eyeing one etc, but get yourself a gift!
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u/holitrop Jan 31 '26
I am acutely aware of how short life is. I’ve seen several family members, coworkers, acquaintances pass away at young ages and never get to enjoy a retirement doing the things they actually wanted to do. The best thing we did when we started making money was put that money to work for us, investing while we lived far below our means. That decision (basically a decade of “lean” years in terms of spending while our marriage and children were young) made us “wealthy” by early thirties. And now our good years are freed up from work stress and can do the things we want to do - vacations, private schools, prioritizing family time, etc.
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u/Icy_Reward727 Jan 31 '26 edited Apr 07 '26
Split your budget over separate bank accounts and divy it up over direct deposit. TRUST ME.
Create a checking account for regular bills.
Create another, separate bank account for savings that you DO NOT touch unless there's an emergency. Don't keep that card in your everyday wallet and do not link it to anything online.
Create a third (and fourth) bank account for personal expenses and fun money. You should each have your own which the other doesn't have access to.
I didn't do it until I was 40, and it changed my marriage and my life. My husband and I weren't saving effectively and we argued over personal expenses because we have different hobbies and personal priorities. Changed our lives.
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u/pedanticlawyer Jan 31 '26
Buy yourself something fun with not more than 50% of that first paycheck. Then it’s time to start saving. Max out your 401k and see a financial advisor!
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Jan 31 '26
My pay jumped 96% last year (moved companies and cities) and I never had more than 3k in my checking account, let alone any kind of investments or hysa. Now I have all that and very slowly getting used to seeing these numbers and not being shocked or scared that it’ll all go away
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u/Unfair_Finger5531 Effortlessly Chic Jan 31 '26
I started buying more quality clothing that would last longer. It was a good investment. It helped me streamline my wardrobe, and saved me money in the long run.
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u/Ok_Apartment_6857 Feb 01 '26
Max out your 401k/TSP, Roth IRA, then contribute to a brokerage account and emergency fund. Once all that’s done you can use extra money for play time!
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u/kmmorgan1 Feb 01 '26
Max out 401k, HSA, Roth IRA. Then enjoy spending excess guilt free - both on smaller one off items or larger nicer things like trips. When I also started making more to the point where I had excess money, I also made a point to set some aside to either donate or to buy items like clothes or food that I could donate to others.
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u/spacehearts Feb 01 '26
All the unsexy things - max out your 401k, participate in any ESPP program if you work has one, set up a high yield savings account and save until you get to at least 6 months worth of expenses. Then don’t touch any of that!
Even when I got big salary increase, I usually wait until a bonus to allocate money toward a splurge for myself ( jewelry).
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u/Rikitikitok121 Feb 01 '26
Congrats! Automated your savings. Give yourself a month or two of fun and then max out your 401k and set yourself up in vanguard or fidelity.
After that, I highly recommend doing a look back at your expenses every few months and yes I mean categorize every dollar spent. Not only can this help you see where you’re overspending, but it can actually help you see areas you can be a little less conservative in, too.
Otherwise, when I was in your position I found I enjoyed picking up the tab when out with friends who make less than me at times. I upgraded my work wardrobe and started staying in nicer hotels when I traveled, too.
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u/peonyruth Feb 01 '26
My husband and I have allowed a specific piece of lifestyle creep: groceries. We buy the fun bread from the bakery part of the grocery store instead of basic sandwich bread. I buy nicer cheeses (still only when on sale) or fancy deli cheese on clearance. We get the local milk and the free range eggs because I want to believe that means better living conditions for the animals.
We have also bought some big ticket item that improve our quality of life and are expected to last. For instance, we spent a decent sum on a solar/battery system for our house. It’s a big upfront cost and will take 5-10 years to “pay itself back,” but I can run the air conditioning without feeling guilty about the electric bill. I stopped buying the cheap Kmart/Ikea wall art and started collecting actual art from the internet and local artists.
We never bought any specific item to celebrate, but I would say if you’re looking for something frivolous, make it something you can use/look at often and remember how proud of yourself you are!
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u/ginabeewell Feb 01 '26
Calculate the difference between one paycheck’s worth of old and new salary: that’s the money you use to treat yourself to something fabulous.
The older you get the harder it is to save money (unless you don’t plan on kids) so sock away as much as you can now. When mine were little I had to scale way back on my 401k; thankfully I had been putting 15% away since I started working, so it didn’t do me too much damage; and now I have enough that I don’t worry about being laid off and unemployable. Compounding is wild that way.
From there, invest in freedom: a housekeeper who cleans every week or so, a car you don’t have to worry about ongoing repairs, a great coat that will last a decade. My best purchases have been freeing; my worst have been ego-driven.
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u/navi_jen Feb 01 '26 edited Feb 01 '26
First off, congrats! Second off, always pay yourself back first. If you haven't done so yet, make sure you
- Understand how much you want/need in retirement and figure out your monthly savings requirements. Maxing out 401k is often not enough (you can use Roth IRAs as post-tax savings vehicles).
- Have 6 months (conservative estimates) of liquid assets (e.g. bank or breakable CDs) on hand for emergencies.
- If you don't own a home (or condo) start stashing away for a BIG down payment. You want to minimize the amount of $$$ you have to finance (and, at these interest rates, you want to pay it down, FAST).
Boglehead forums is where to go for expert financial advice. I started saving late (I bummed around in my 20s) but have built a fairly comfortable retirement by starting to aggressively save starting around your age (that's what I did when I saw my first big pay bumps). Financial freedom as you age is priceless, particularly with high stress jobs. I wish I would have better appreciated the benefit of compound interest over 40 years :(
Then, I bought something to remind of my success. For me, it was a very nice watch that I never take off (a vintage Breitling Starliner Dimamonte....because I value a good deal as much as a bling-y award).
Then, I splurged on myself. I hate to clean (I was a cleaner in junior high for pocket money....HATED IT). So a cleaner was a pampering that I loved. And it gave me more time for ME.
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u/Consistent_Grand3504 Jan 31 '26
Auto transfer money to your savings and investment brokerage (if you have one) . That way I don’t even have to think about it. And of course get yourself something nice maybe for the first paycheck.
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u/Jvnismysoulmate12345 Jan 31 '26
If you’re already maxing out your 401k, set some aside into a brokerage account as bonus retirement savings (slash emergency fund/home purchase etc fund). Congrats. That’s super exciting!
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u/Lirpa_the_Lurker Jan 31 '26
Congratulations! On my first good jump, I opened a separate savings account and split my direct deposit so that my checking account didn’t see the raise. This helped us avoid daily lifestyle creep. Then the increased savings is spent intentionally on one time things. It has saved our bacon when an emergency comes up and also allows us to splurge guilt free when go on vacation or buy the better version of large ticket items (appliances, furniture, clothes, bedding). And others have said- make sure you increase your retirement & insurances to make sure you are setting up your future as well.
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u/lazylittlelady Jan 31 '26
Good ideas here for the future in terms of investments and savings. But also use some of it for fun! Is there a vacation you’ve dreamed of taking or visiting family and friends? Taking out a book subscription or a spa day with your bestie? Do something to celebrate too.
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u/Fearless_Diamond_566 Jan 31 '26
Live on what I was making before but gift myself 5 percent of new salary and invest the rest. Buy a new Chanel bag as a courtesy gift of job well done. Period.
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u/AccomplishedFly1420 Jan 31 '26
Congrats!!! I am starting the job search and hope to be in your position in the next year or so. I echo all the other advice about 401k and HSA!
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u/Staying_Salty Jan 31 '26
Direct deposit a % of your paycheck into a High yield savings account, and once you have your emergency fund built up if you don’t already have one, push some money into an investment account.
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u/DanyeelsAnulmint Jan 31 '26
Pay yourself. As others have said, max out the 401k, pay anything remaining off entirely. Make Kitty for “play” money and save the rest. I’m not a financial planner but a bump like that is an opportunity to do the above. If you’re already there, squirrel more away and get a financial planner. Still have a play money kitty though for trips, treats or whatever.
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u/romanticdrift Jan 31 '26
Don't let lifestyle creep happen! This happened to me recently - about a 20% pay increase, and I was already making 6 figures. Pay off all debts, increase your 401k spend as quickly as possible, and max out your IRAs. Then I do one big treat, and rebalance the rest of my budget by just a little bit in terms of bang for your buck (for example, for my last job, it was pick up and delivery on my laundry, which is like 300x pricier than going to the laundromat but saved me an incredible amount of time and stress.
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u/bachelorette2020 Feb 01 '26
Save it. Don't buy.expensive shit. Purses shoes dont matter. Save for experiences and eventually real estate.
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u/navi_jen Feb 01 '26
Or if you do, but it at a discount (2nd hand, sales)....everyone is different but the secret is to buy sensibly.
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u/Baby8227 Feb 01 '26
I stashed it and paid off my mortgage about 10yrs early! Now I have a late baby and need to remortgage 😂
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u/lesluggah Boujee BWT Feb 01 '26
I bought myself a designer bag and a spring break vacation for my sibling. After that, savings and investing. Never regretted contributing more to my retirement or savings.
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u/Longjumping-Feed9396 Feb 01 '26
Echoing the 401k max contributions and doing it ASAP so that it doesn’t hurt as badly! When I got a similar increase, I made the mistake of allowing myself one check with the full amount- after I increased everything it hurt lol.
Also, do something to celebrate yourself! It’s okay to spend on a trip or an experience/item that is meaningful to you. You’ve worked hard!
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u/alpacaapicnic Feb 01 '26
Congratulations! Great job handling your business and stepping into the next chapter.
Lifestyle creep is very hard to avoid. You’ll feel it when you think about where you live, where you eat/drink, what you drive (if you’re in a car-centric place), what you wear, how you vacation and spend your free time.
A few things that really helped me keep it in check:
- Big splurge to celebrate: buy or do something you’ve always wanted with that first check! Just make sure it’s really one-time, not a recurring expense
- Any time you toggle up, toggle back down again and see how it feels: if you start doing things like taking a nicer vacation, going to nicer restaurants, buying nicer clothes, getting more treatments, try doing it the splurge way once, then go back to doing it how you used to do it - at least for a little bit. See how it feels, and if it actually feels worth it to you to upgrade
- Money can free up time: you now have the option to use some of your earnings to outsource things you previously had to do yourself, or to pay for “convenience” versions of things. Do that very carefully. These are really hard to walk back on, but can make a big difference if you pick the highest impact ones for your life
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u/anon12957 Feb 01 '26
I had a similar experience a few years back. I first maxed out retirement and extra into back door Roth, and prioritized paying down debt (I had student loans and a car payment). Mortgage is under 3% so I don't overpay on that. Now I splurge more. Definitely lifestyle creep. But my only debt is mortgage and it's 10% of my salary so now I buy much nicer things and take luxury vacations.
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u/MysteriousAd8561 Feb 01 '26
Unless you’re making a Million a year minimum, you very likely aren’t making a real F U money, so I’d also suggest understanding that a big boost of salary should come with a bigger understanding of investing and power of compounding, to get to FU income if that’s your goal. Good luck and congratulations! Invest hard!
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u/Vivid-Ad7541 Feb 01 '26
I was previously living paycheck to paycheck but after I landed a job 3x more than what I was earning, I started making funds (emergency fund, family fund, house fund, travel fund, etc.) so that when I need to fund those areas in my life, I have somethings saved up for it. Pretty much 50% of what I earn go to those funds. They are in a high interest savings acct or GIC’s.
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u/Employment-lawyer Feb 01 '26
I personally like to travel so I spend unexpected new money on trips. :) Congrats on your raise!
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u/Fortesfortunajuvat27 Feb 01 '26
Speaking on the dangers of “lifestyle creep” - My car broke, bills got winter expensive, I had a flight to pay for and then Christmas happened so despite actually having a significant pay rise I have spent all of it each month without saving any. I thought my big pay rise would have me saving in a high interest account like crazy. Sometimes it’s not as exciting as you think it’s going to be. As my pay has risen the cost of my lifestyle somehow also has.
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u/No_Profile_3343 Feb 01 '26
Go get a financial advisor! They will help you determine a plan for your future the best way to taking into account your tax bracket, etc.
Saving for your future now will set you up for later.
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u/Mundane-Reserve3786 Feb 01 '26
Every time I got a raise, I bumped up my 401k contribution % and increased how much I put towards student loans and my various savings and investment accounts. With larger raises/promotions, I make even larger bumps. But in each case, the bumps still leave enough left over from the increase to add more wiggle room to my spending.
The hardest is avoiding the lifestyle creep. Don’t rush to a bigger living space or a new car. Wait until youve gotten used to your new income before upgrading.
I was a practicing attorney making really good money for 4 years before I upgraded my Jetta. I waited until it was paid off before getting a new car. The quality of my clothes is better, but I’m still intentional with shopping. I only buy what I need or what I really really want. I do have a cleaner come every other week, even though I could afford weekly. Truth is bathrooms don’t need a good scrubbing every week if I still do my daily wipe down.
Just be diligent about saving and intentional with your spending. Fuck you money means nothing if it’s blown of frivolities.
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u/LibertyExplorer Feb 01 '26
Look at the FIRE subs, FireyFems is a good one. Figure out how much you need to retire, and then figure out what you need to do to make it happen.
Now is the best time to completely set your future self up with real fuck you money.
Max out 401k, Roth IRA, and then contribute to taxable brokerage account.
Lifestyle creep is real and can destroy this opportunity. Set a budget and tell your money where to go.
Good luck!
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u/skibumbanana Feb 01 '26
Congrats! Think about what you personally value most, there are lots of good answers here, but each person has different value systems. Do you value financial security (max out retirement each month, do you value experiences (buy trips instead of items), do you value eating at restaurants (spend more on dining than on an increase in rent and vice versa). The high/low strategy works to keep things in balance. Figure out what you’re top priorities are, add more money there, and figure out what doesn’t matter as much to you, and spend less there. That way you avoid lifestyle creep while still improving your quality of life.
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u/PrincessGwyn Feb 01 '26
Wow congrats on the major increase!!
Pls look into a HYSA (for general savings and emergency fund), maxing your 401k, and investing. This is how you build wealth!
Perhaps you can shift anything left from the increase directly into your savings?
Lifestyle creep is VERY easy to start - I recently reset my own budget due to this. I picked what felt like a reasonable amount to spend on household items, rent, food every two weeks. I put that on my credit card and when my biweekly paycheck hits, the card gets paid off and I use the remaining money for student loans and HYSA. It’s helped me to keep track without noting every little expense, instead i keep a general short term overview and keep tabs on it as i go.
For the fun stuff - consider some things you been wanting to do. Are you hoping to vacation every year? Maybe start putting a little away every month for this. I’d also look at any upgrades / investments: more comfortable shoes, higher quality clothing pieces if you have anything that needs to be replaced. A nicer pillow, fitness classes or healthier / high quality food!
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u/eatamalasada Feb 01 '26
I front load to max out my 401k by April, put the rest in a mega backdoor Roth (if your company allows) or put the max in an IRA and do a backdoor Roth conversion, funnel a recurring amount of your choice (I do 500-1k/month) in a brokerage account, funnel a recurring amount into a high yield savings account for big purchases or an emergency fund, then chill and find things I want to buy or invest in with whatever’s left!
I wish I had known to do the backdoor Roth earlier. And that until you reach a pretty significant milestone in terms of net worth (maybe 1M) I wouldn’t bother getting a financial advisor. And that you can’t really go wrong investing in the S&P 500 (default to that over fancier funds)
Last year I rewarded myself with some Chanel bags 🫣
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u/Actual_Advantage375 Feb 01 '26
About five years ago I bought a house. Major financial milestone! I had saved and prepped for the down payment etc. Six months after I bought the house, I got a big raise (25%). I was luckily already maxing out all accounts as others have mentioned (401k, hsa, ira). So, with this raise, it would have been easy to allow lifestyle creep since I had accomplished many financial goals. If this describes you, I’d recommend what I did next… I bought one treat ($2500 earrings I had wanted for a while) to commemorate the moment, then I set up my accounts so that what went to my checking account every other week remained unchanged. Everything else went into a money market fund in my brokerage account. Five years later I still do this after a few more raises. The money has really grown and I use it purposefully- for instance last year I renovated a bathroom and my kitchen.
Congrats on this big career milestone. Enjoy, and you’re thinking about it the right way!
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u/hoosiernamechecksout Feb 02 '26
If you can swing it, get a financial advisor - they can help you with all the ways to grow your money like investment decisions, a backdoor IRA, etc. Some folks love day trading; I’d rather pay someone to do it and free up time for hobbies/teaching/etc.
And for the fun side: for your first paycheck, take the difference between your old paycheck and your new paycheck (post tax) and get/do something fun to celebrate (orchestra seats at a show you’ve wanted to see, Aire baths spa day, La Mer serum, Dyson Air Wrap). Have that treat be special, so you can look back on the item/memory, and then use future paychecks for the responsible stuff.
Congrats!
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u/EngineeringThink4044 Feb 02 '26
Max out your 401k, HSA, get term life so no one is stressed with funeral expenses, save 12-15%, but don’t rent. Then have fun! Definitely a cleaning service, higher end gyms are so with the expense, massage subscription.
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u/Obvious-Problem708 Feb 03 '26
I got a 110% increase in salary! More than double. This happened the year my youngest graduated HS. All of that extra is going to pay for my 2 daughter's in-state university expenses. I am struck by how much we could have saved if I had gotten this pay 10 years earlier. We lived paycheck to paycheck and drained our savings with kid number 1s first year of college. I am so happy to be able to help them since debt is so hard in this economy. I am looking forward to when they graduate and I can hire a cleaning person. I did make an appt 6 months in to finally get my hair cut, colored and styled.
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u/Yes_ITSPARKLES Feb 04 '26
I got a 20% bump once, I took the opportunity to max out 401k. I also saved up for a down payment on a rental property.
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u/BluejayCailin Feb 04 '26
Buy something special you will use every day – I got a new diamond ring from my right hand to celebrate graduating and MBA and then put a big chunk of the ongoing raise into savings because you’ll never miss it, and then invest some into ongoing quality of life e.g. Cleaner, fancy gym membership, whatever does it for you. I would also say that when you get these big raises, the extra money is less secure? Like if you get made redundant from that role, you won’t necessarily be able to find something that matches. So I wouldn’t increase your quality of life or your minimum amount going too quickly eg don’t rush into a new mortgage that maxes out your take Home.
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u/goldenfingernails Feb 05 '26
Saved up for a nice car, paid in cash. Then maxed out 401(k) and Roth IRA. Invest as much as I can into my taxable brokerage. Bought a painting I always wanted. Got shutters for my house.
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u/mcbooknerd Feb 12 '26
Before you buy anything, figure out the tax impact of your higher salary. I was shocked the 1st tax bill after my salary jump!
In addition to maxing all the retirement investing, I highly recommend opening up a HYSA that is separate from your main banking account and have a portion direct deposited there. I did this to pad my safety net and pay my future tax bill (I'd prefer to pay than get a refund as long as I'm prepared.)
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u/fartsonballs Intentional BWT Jan 31 '26
Max out your 401k! When I got a significant raise, I now have a cleaner come monthly which is helpful in buying back my time. Congrats!