What I Did With My Last Raise

Getting a raise at work is always an exciting thing. Sometimes they come around during your annual performance review, other times they come with a promotion, and some may even just be completely unexpected! No matter how it comes or why it happens, it’s always a great feeling. I mean your hard work is paying off and being recognized — yaaasssssss!

I want to share with you what I did with my last raise. I really want to tell you that I was so excited, I decided to treat mah-self to a shopping spree, or I upgraded my iPhone 7 to the newest model, OR I traded in my Honda Civic for a fancier car…

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Oh Mr. Krabs, stop it.

Well, I didn’t do ANY of the above. I didn’t buy myself something new, I didn’t upgrade anything, I didn’t spend a single extra dollar that I wouldn’t have normally. I decided to save the entire amount that my salary was raised by into my 401(k).

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Yes, I’m serious. You see, people get raises all the time and it’s in our nature to get really excited and want to spend more too. #MoMoneyMoProblems! Just because your salary gets a raise, doesn’t necessarily mean your lifestyle needs to get one too.

You’re already paying for your bills and keeping up with your lifestyle, and making more money isn’t going to increase how much you need to spend unless you let it be that way. So if you just got a raise, or think you may get one soon, really think about what you’re going to do with it.

Like I said earlier, I decided to increase the amount of money I was putting in my 401(k) and here is why:

  1. I didn’t need to buy or upgrade anything. I could continue to pay my bills and keep up with my expenses fine without the extra money.
  2. I’m paying less in taxes. You’ll remember from my last post that when you save in a retirement account, like a 401(k), the money goes in on a pre-tax basis. By saving a bigger amount into my 401(k), my taxable income is smaller.
  3. I’m saving more for my future. We live in a world where we are constantly bombarded with advertisements telling us to spend more and just “treat ourselves”. While I love treating myself, and we should all do it a little bit here and there, sometimes you have to sacrifice a little bit now to have more down the line. Treat yo future self too!

This is what I did with my last raise, but it’s not the only thing you could do if you found yourself making more money. For example, if you have student loan debt, you could pay more off every month. Or you could simply save more cash for your next big purchase — like a down payment for a house.

There are many options, including shopping sprees and upgrades, but a little self-discipline can go a long way. What will you do with your next pay raise?


Nothing on this blog should be considered personal actionable advice, research, or an invitation to buy or sell any securities. Consider all risks before investing, including the loss of your hard earned money. Vee is an Investment Advisor for Warren Street Wealth Advisors, this blog reflects her personal views, and not that of Warren Street.

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