Hi all. Apologies if this is not allowed here. I know people out there are struggling, but I just want to share my good news with someone.
It’s a big milestone of accomplishment in my life, but I feel weird just telling family members or my online friends about it. The only other people who know are my coworkers because we all got the same raise. Money doesn’t go as far nowadays due to crazy inflation post COVID and my area has higher cost of living than where I grew up, but I’m still very happy about this. I remember back when I used to only make minimum wage. All those years of schooling eventually made their way back to me. I’ll never make as much money as someone like a doctor, but it’s definitely enough for me to live comfortably as a single person.
Anyway, I’ll delete this in a bit (or sooner if it gets removed by a mod), but I hope you guys out there have a good weekend.
Edit: Thank you guys very much :)
Edit 2: Jeez there are so many more comments than I expected. You guys are so nice!!
Congrats! The trick is to not increase your spending, and take the excess and either save it or invest it. Remember: just because you can afford it, does not mean you need it. :)
The trick is to increase everything proportionally. Not increasing your living standards is just poor people logic.
Absolutely make your life better in the moment. There’s no telling whether you’ll keel over in two days from an aneurysm and all that saving did absolutely nothing.
But yes, 401k > Mortgage as long as you’ll be saving for 30 years or more. You’ll need about a million or more to retire comfortably these days.
Ok, I’ll give that if a person is living in less than ideal standards, getting a raise is a great way to enhance their quality of life and could be argued is necessary.
I didn’t outright say this, and I should have, but I was referring to spending for the sake of spending; I.e., I got a raise so I’m going to go out and buy a PS5, new super computer, a BMW, etc. there’s nothing inherently wrong with buying those things. It’s simply a matter of doing so responsibly.
As for poor people logic, so what? It’s sound logic. Of course it works for me personally. YMMV. But I have gone through a chapter 7 bankruptcy in my 20s, and now my FICO is around 800. For me, it was the mentality that I had money so I should spend it that got me in financial trouble. Treating my money as an asset that should be cared for got me out of trouble.
This only matters if you’re making more than your peers. Most of my friends had engineering degrees coming out of college so we weren’t massively different in compensation. I’m pretty open amongst them, but I wouldn’t tell anyone how much I make it i thought it was more than 10-20% different than them.
This only matters if you’re making more than your peers.
Ehhhhhh. Eating better costs money. Home improvements or not living in a shit hole costs money. Clothes that aren’t 10 years old costs money. Children. Health. Teeth. Eyes. Safe vehicles. Green living.
It all costs money and is prohibitively gated by cash.
Improve your life now. Quit buying shitty cheap products and buy better ones. Vimes Boots. Take a vacation to somewhere that isn’t your couch.
There’s so much that isn’t some Lemming’s idea of trying to reconcile being poor so they aren’t out murdering billionaires.
In all seriousness though, congratulations on your life changing accomplishment. Keep up the great work!
Congrats and well done! Take some time to celebrate! (And then max out your 401k if you’re in the US and you haven’t already)
Yeah I’m bad at figuring out how stuff like that works tbh lol. I think the last time I looked at my 401k stuff it said that I should be contributing more than I am for some reason. Gotta figure out how to adjust that.
I’m going to have some new financial goals now, but I’m not sure what they’ll be. If it should be something like working towards paying down loans first, which loans to pay down first (I have a very large amount of student loans after all this and I also have a mortgage), or if I should work toward improving my living space and making it nicer. We’ll see I suppose!
Might be worth working with a financial advisor, we just got one and I feel much more comfortable with my money stuff
Wwell I know at the very least, a financial advisor probably would tell me not to invest it in my home like that. That part would be me weighing doing something for myself that isn’t totally necessary vs. the more responsible financial decision. But a financial advisor might not be a bad idea in general!
I’m sure there’s a personal finance thing around here somewhere!
Personally, I’d work on making sure I have a cash safety net. Something like 6 months expenses in my favorite high yield savings account.
After that I would pay off any loans with a high rate. If the rate is <5 percent, it may be worth putting that money into a 401k or investment account. If it’s above 5 percent, I’d consider paying it off early. The idea being that if it’s a low rate then you can invest that money and earn a higher return than it would cost you.
Aside from that, I’d do my best to max my 401k contribution to take advantage of those sweet tax benefits. If nothing else, make sure you’re taking advantage of any employer matches.
Again, awesome work on the job!
Doing your best for both your present and future self is usually a balance.
Some functions that were helpful to me were
- half your raise into savings or retirement. You’re less likely to overspend if it never gets into your checking account. At the same time, you still get a nice raise
- some 401k plans offer an automatic increase. It would be a hardship to my current self to suddenly max out my 401k, but if my co tribution automatically bumps up 1-2% every year, present self wont really notice the loss and future self will thank me for growing toward maxing my 401k
Remember the most important part of your retirement savings is just doing it. The power of compounding returns over many years can be more important than which investment might do best. Remember that your contribution is something you control whereas most investment choices are speculative and you have no say over whether they do well or not
Hi, congratulations! I’m so happy for you. Please consider a reputable financial advisor. Not some slick, well-advertised person, but someone who comes with a decent reputation. When meeting with them, use some intuition, don’t fall for flattery or wild promises. You can always say you want to consider their advice. Some lawyers also offer this type of service. I woods encourage you to be kind to others and our environment, with your investments.
Congrats again, well done!
Instead of investment advice, I’ll just say never forget how hard you had it, what it was like to get minimum wage, and remember there are always hard workers being paid less then you that also deserve a shot. You did the work, be proud of what you’ve achieved. But probably don’t get into specifics with family, people get weird about money.
I’m gonna double down on your advice and say don’t tell anyone how much you make, except your SO. If someone asks just say “I’m doing well for myself.” And if they press you say “I prefer to keep the specifics private”. When I started bringing in money I made the mistake of calling my friends to celebrate and within months they were all hitting me up for cash and pulling on my heartstrings.
I don’t have any advice. I just wanted to contribute a humble HELL YEAH BROTHER.
