#WhatToDoAfterARaise
1. Create a Budget to Manage Your Increased Income
After receiving a raise, it’s important to create a budget that reflects your new income. This will help you make informed decisions about your finances and ensure that you are maximizing the benefits of your raise. Consider allocating a portion of your raise towards savings, investments, and any other financial goals you may have.
2. Increase Your Savings and Emergency Fund
With your increased income, you may want to consider increasing your savings and emergency fund. This will provide you with a financial cushion for unexpected expenses and help you reach your long-term financial goals. Consider setting aside a portion of your raise towards building up your savings and emergency fund.
3. Maximize Your Retirement Contributions
Another important step to take after receiving a raise is to maximize your retirement contributions. Consider increasing your contributions to your 401(k) or other retirement accounts to take advantage of your higher income. This will help you set yourself up for a comfortable retirement and ensure that you are on track to meet your financial goals.
4. Consider Investing Your Extra Income
If you have extra income after covering your expenses, you may want to consider investing it to further grow your wealth. Consider exploring different investment options such as stocks, bonds, or real estate to make your money work for you. Just make sure to do thorough research and seek professional advice if needed.
5. Treat Yourself (in Moderation)
Lastly, don’t forget to treat yourself for your hard work and achievement. While it’s important to be responsible with your finances, it’s also important to reward yourself every now and then. Whether it’s a nice dinner out, a weekend getaway, or a new purchase you’ve been eyeing, make sure to enjoy the fruits of your labor in moderation.
With these tips in mind, you can make the most of your raise and set yourself up for financial success in the future. Congratulations on your new job and increased income! 🎉
Take your parents out to a nice dinner
Open a Roth IRA and max out your annual contributions. Your annual limit is $7000 for FY24.
Congrats on balance in HYSA, minimal living expenses, and pay raise.
I’d focus on growing the 401k and consider setting up a target retirement date mutual fund from an investment firm with no load fees and start auto contributions each month and go from there.
>Should I do anything in particular with this increase in pay?
Save at least half of every raise.
Increase your 401k contributions. Take your parents to a *nice* dinner as the other poster suggested
Most important is to get your company 401K match maxed. After that save what you can (I’d aim for 15-20% total savings including your companies matching % to your 401K). So if they do 6% then you save an additional 9-14% out of your pay. It sounds like you might even be able to go higher with your situation but I’d at least do that and you will be set for life if you keep it up.
Take half the raise and put it into your 401k. You’ll never miss it.
It should be reversed. I wish you had 96k in your 401k & $1600 in HYSA
1. As everyone says, take your parents out.
2. throw 4K more into the HYSA for an even 100K
3. Open a Roth IRA and throw as much as you can in (7K Max for 2024)
4. Def make a budget and see how much you $$$ you will have after 401K, IRA, Taxes (You will be paying a little higher income tax, you’ll be paying about 10% more for Federal tax on the raise) for housing and stuff.
5. Contribute to a HSA if your job has one.
6. Jump on 401K right when you are eligible at this new job and if they offer a match, my rule of thumb is always go 1-2% above.
Live like you only make 45 and invest and save the rest.
Increase your 41k. It will help with taxes. Also buy yourself something nice.
Up your 401k contributions a couple percentage points.
Put 15% minimum into your employer’s 401k retirement plan.
Keep living like you make 55 and save/invest the rest.
Take yourself out or give yourself a nice gift.
Don’t change your lifestyle.
Save all the extra money.
Your time horizon for investing is long, I would honestly get the 96k in some equities. And try and make something happen. Great job tho, at 24 that’s awesome.
Set aside 3-6 months of emergency savings in the HYSA then put the rest into a brokerage account and buy $VOO.
Why in the world do you have $96k sitting in a HYSA, while only $1600 in a 401k? You should be plowing money into your 401k right now when your expenses are low. You certainly don’t need any more in savings. You would’ve made around $20k in the last year if that $96k was invested in an S&P500 index fund. I’m not saying to immediately invest everything, but pump your 401k contributions up significantly at your new job – at least 15% – and put $7k of your savings into a Roth IRA this year. And probably open a brokerage to invest another $50k or so. Unless you need that cash in the next few years for something, it should be invested.
Don’t go buy stuff just because you got a raise/wage increase
I started investing in my 401k when I got my first job at the minimum I could to get the match and then with every raise I’d increase by a % or two. Eventually I was maxing it and started on other investment accounts. Increasing automated savings with salary bumps is a nice way to help moderate lifestyle inflation!
What are you saving for that you need almost 100k in a HYSA? Unless you’re planning to buy a house with that in the next year or two, I’d say you should start moving that money into tax advantaged investment accounts and buy an ETF. Put enough in your 401k to get the full employer match (if they match), then max out Roth IRA, then put any leftover either in 401k or a taxable brokerage account. Repeat each year. With your raise, I’d say treat yourself to splurge on a one-time purchase, then immediately go back to living on under $55k/year like you have been doing and save/invest the other $13k.
You’ve posted this multiple multiple times
Every time you get a non COL raise, increase your retirement savings by at least a percent. It seems like you should possibly do more.
Start maxing out your retirement
Watch out for lifestyle creep. Keep your expenses low and invest, invest, invest
What’s your current APR on your HYSA? $300/month is not a lot.
I make ~$209/month with half of what you have at 5%
95% VOO 5% BTC keep adding as you increase salary.