Ok- You got a new job and more $$ what do you do with it?

So simple question

What do you do with that extra money you receive once you get that new job or promotion? If you were able to have a good life with your old salary you surely are comfortable with the new one. So do you start spending more? Do you start saving more? Contribute to your 401k more or start investing the new fortune or do take your family to better and longer vacations?

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joelsfood

I got a promotion and a raise earlier this year, and I chose to do the following
1. Increase my 401k contributions
2. Increase my life insurance
3. Increase wife's discretionary budget

Other than that, no specific changes.

TheFORCE

joelsfood wrote: »

I got a promotion and a raise earlier this year, and I chose to do the following
1. Increase my 401k contributions
2. Increase my life insurance
3. Increase wife's discretionary budget

Other than that, no specific changes.

Haha the wife must have been happy

.
I did the following.
Increase 401k contributions
Increase savings amount
Increase contributions to investing amount
Do some small renovations.

5ekurity

Inherently, I think people spend more because they can 'afford' more - which can be a fatal flaw and lead to a lot of money issues (seen it happen to other people).

My bump earlier this year has been going to:

Ongoing remodeling of the house
Increase savings
Develop / invest in other money making opportunities

10Linefigure

I just started a new job this month with a 1k a month salary increase and here is what I reccomend:

Maintain your current lifestyle
Pay off any credit cards or debt if you have any (except entire house / car) ( I didn't have any so skip this step)
Finish maxing out your Roth IRA for the year
Use the rest to do anything you want ( I put it into a normal savings account to save for a plane ticket home this Christmas and Europe trip next spring)

It all depends on how you want to live and whats important to you. Perhaps a new wardrobe or a gift for that special someone.

jibbajabba

Drink more whisky ...

Mooseboost

jibbajabba wrote: »

Drink more whisky ...

I like this answer.

Myself - I would probably save it or make extra car/bike payments.

NetworkNewb

procreate, then watch that extra money disappear!

dave330i

401k's been maxed out for a while, so extra earnings go towards savings.

Dakinggamer87

I would do the following if I got a raise/increased salary:

Maintain your current lifestyle
Pay off any credit cards or debt if you have any (except entire house / car)
Finish maxing out your IRA/401k
Continue adding to my savings account, donations to my church/charities, and travel

alias454

hookers and blow

Seriously though, home improvements, better toys, and saving for a rainy day are the things my additional money goes too. We are also able to enjoy life just a little better.

joelsfood

Nice to see that at least in writing, most people here are already at point where they make comfortable living with existing pay, so they can be frugal and smart with any raise. Just a couple of years ago that wouldn't have been true in my case.

Essendon

Increased my mortgage and car repayments each time my salary's increased. Result is the house is half paid off and the car fully.

philz1982

Buy more houses...

gespenstern

My wife spends everything.

pevangel

Increase 401K, savings, and investments in stocks.

discount81

Spread it out between some Index funds, stocks, buying physical gold bullion bars, and unfortunately having to fund your own retirement.

I really hate the North American system of having to fund your own retirement, it's one more thing you need to worry about here.

In Australia retirement funds are mandatory for employers to contribute to, you can give extra if you like, but if you are getting 9-13% of your salary put in for you, and you make $150k + per year you will have a healthy retirement without ever having to think about it, not to mention you can't touch it under any circumstances before the age of 60.

TheFORCE

discount81 wrote: »

Spread it out between some Index funds, stocks, buying physical gold bullion bars, and unfortunately having to fund your own retirement.

I really hate the North American system of having to fund your own retirement, it's one more thing you need to worry about here.

In Australia retirement funds are mandatory for employers to contribute to, you can give extra if you like, but if you are getting 9-13% of your salary put in for you, and you make $150k + per year you will have a healthy retirement without ever having to think about it, not to mention you can't touch it under any circumstances before the age of 60.

US companies match your 401k contributions too. My last company matched 5%, my current matches 6%. And bigger companies match a lot more i think.

dave330i

discount81 wrote: »

In Australia retirement funds are mandatory for employers to contribute to, you can give extra if you like, but if you are getting 9-13% of your salary put in for you, and you make $150k + per year you will have a healthy retirement without ever having to think about it, not to mention you can't touch it under any circumstances before the age of 60.

US used to have pension funds. It bankrupted many companies, cities and will probably bankrupt few states.

discount81

TheFORCE wrote: »

US companies match your 401k contributions too. My last company matched 5%, my current matches 6%. And bigger companies match a lot more i think.

Yeah I understand this, but the system is just extremely poorly managed.
Also it comes out of my pay packet, in Australia a lot of companies will offer your Superannuation (401K) on top of your pay.

http://www.forbes.com/sites/nextavenue/2013/08/19/to-solve-the-u-s-retirement-crisis-look-to-australia/

I don't see how it could of bankrupt a company, you pay someone a salary, you can include the 9% super into their pay, so you are still paying the same salary, if you are a generous company you can pay the 9% on top of their salary.

TranceSoulBrother

No matter what, always use the extra money to:
- pay off debts or improve your current situation (home improvement or vacation planning to celebrate)
- so that you can use it to invest for your retirement.

The idiot is the one that goes to upgrade to a bigger car or drastically changes their lifestyle.
I was that idiot a couple of times. No more!

paul78

dave330i wrote: »

US used to have pension funds. It bankrupted many companies, cities and will probably bankrupt few states.

Australia's Superannuation system is nothing like pensions in the US. I had done a bit of reading into this system last year. IMHO - it's perhaps the best retirement system that I've come across. Compared to US's social security system or 401K's, it overall provides more choices. I think are are several hundred superannuation funds at least.

As for the OP's question - I think I would likely invest half and spend half. I can certainly relate to the notion of not living beyond your means. But if I am going to work hard and earned a higher wage - I'm certainly going to enjoy it. I "work to live" not "live to work".

alias454

Exactly right. there is a difference between living beyond your means and enjoying the fruits of your labor.

UnixGuy

Save.

Spend savings on experience (i.e. Live).

Drovor

Using my promotion/raise to try to recover savings. Would also like to max out roth IRA. Unfortunately I was not able to this past year.

Krones

Max out 401k and Roth. Sigh. Maybe in the next life. I know boring. Maybe more cool toys.

ScrawnyRonnie

Maintain current lifestyle and continue to save for purchasing a home. No debts to pay and I want to keep it that way.

W Stewart

I'll tell you what I plan to do with the salary increase from the new job I'll be starting on Monday.

Get a new TV to replace the one my 3 year old son broke
Get a screen protector for that tv
Get some new couches for the living room
And finally, one of these days get a ps4

BlackBeret

discount81 wrote: »

I don't see how it could of bankrupt a company, you pay someone a salary, you can include the 9% super into their pay, so you are still paying the same salary, if you are a generous company you can pay the 9% on top of their salary.

The old pension plans weren't investment funds. It was "You worked for us for 30 years, we're going to continue paying your salary until you die". At a certain point the companies would be paying the retirement of say 300 employees who no longer worked there, plus the salaries of the 80 employees who did work there, etc. Much like our current social security system, and to top it off the companies were dipping in to the funds that were set-aside, much like our social security system..

SaSkiller

I'll be getting a raise sometime before the year is out, doesn't look like I will be bringing much extra home so, nothing.Best I can do is move to a crappier cheap apartment, decrease my expenditures and hopefully get a second job or extra hours. With any luck i'll be able to save some real money. Eventually.

Mike-Mike

gespenstern wrote: »

My wife spends everything.

I have the same problem.... and in Louisville... maybe it's the water