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.
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
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
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.
I'm what you might call a well wisher in that I don't wish you any specific harm
Congratulations you made it
You leave this post up then when you're feeling down look at the messages.
Hey nice! My father has always told me that his biggest regret was not maxing out what he was allowed to put into retirement. You don’t care when you’re young, but it makes a HUGE difference for the second half of your life!
To add on, if your company matches for 401k contributions, NEVER put in less than the matching amount. Like, if they'll match contributions up to 5%, never go below 5%. There are very few times you get legitimately free money in life, and this is one of them. Always put in more if you can, ofc, but the minimum should be the matching amount.
Nice, but save your money. The best time to do that is now.
Congratulations! As someone who moved countries and started at the bottom ($6 per hour and 15 hours days) I know the feeling of looking back with disbelief. Sounds like you really earned it!
As one of those people who is struggling a bit: Never let the state of the rest of the world stop you from celebrating your own wins!
Congrats on the raise, that is really awesome. Remember to put a decent chunk into savings :D
Fuck yeah man, gg. I'll never forget the day I hit 6 figures and how proud I felt. Soak it in - you earned it!
Cheers bro, to each one of these six figures 🥃🥃🥃🥃🥃🥃
Congrats! Some unsolicited money advice I wish I had known earlier in my career:
If you have a mortgage and the interest rate is less than 7ish percent and you're wanting to pay it early, something to consider:
You might put whatever extra you were planning into a Roth IRA until it's maxed and also max out your 401k if your employment has that. Historical yield is 7ish% and compound interest will help you immensely 20-30 years down the line.
Paying off the house early is nice feeling but you can possibly refinance for lower rates later if it's currently similar to or higher than historical investment yields. You could also do a little bit of both but prioritizing retirement accounts is the smarter move imo. So if your mortgage rate is 5% and you want to pay that down, you're leaving 2% on the table by not putting it into either an IRA or an index fund instead.
This is assuming you're not carrying other debts at higher rates like credit cards, those should be your priority. Next would be 3 months of all bills saved up, you can find some decent interest rates on savings accounts. I have Acorns and it's at 5% so the 3 months reserves will stack interest for you too.
Congrats my friend! Happy for your success!
If I can pass along some advice, be careful with your newfound money. Try to live at or below your current means, and get more into saving and investing your extra income. Your future self will be extremely grateful.
Good luck bud!
Congrats! Seeing your grind start to pay off is awesome
Now is a great time to re-visit your money management to adjust that retirement grind.
Yo! Congrats! Make sure to stay on top of your budget and don't let the extra income turn into extra expenses.
Congrats.
Was just in a thread about lifestyle inflation. https://www.investopedia.com/terms/l/lifestyle-inflation.asp is an explainer. Keep it in mind so you don't end up living 100k paycheck to 100k paycheck
Congratulations!
I went from earning $12 under the table to 6 figures in 5 years. It's a really major change. Once you have a year or two of that, and enough saved to survive basically any adversity, you realize how stressful your life was before.
Some unsolicited advice:
Budget. I've never been good at it, so this is my strategy:
-
I Keep two months' basic expenses in checking account. Food, gas, rent, phone, internet, insurance, loans.
-
At the end of the month I transfer the remaining money to 3 accounts: 1/4 to long-term savings (this was initially my 3-month emergency fund, but turned into something more blended with a 3-month reserve). 1/4 to short-term savings (travel, gifts, clothes, fun). 1/2 to investments (stocks, ETFs, etc).To start out, all the money went into the long-term account. Having 3-month's savings is the true key to both feeling safe and avoiding credit card debt.
That's it. Literally. If I transfer less money at the end of the month, I either overspent or had some annual "surprise," like auto registration, Prime bill, etc. If I transfer more, it was a successful month.
Congratulations! Since I already have a drink in hand I'll toast to your achievement!
I’ll line up to give you a high five on that! It’s a damn good feeling to hit that milestone. Great job!
Congrats 🎉👏!
It's a big hurdle to get over, especially if you come from a background of poverty.
Good job dude! I'm happy to hear a success story from anyone these days. I wish you the best in reaching your next milestone as well.
Congratulations!
Congrats! 🎉
Congratulations!! That's awesome!!
Welcome to the 100k club! Congratulations!
It's weird to feel like you're earning too much. It sounds like you are earning what Homer Simpson, Red Foreman, and Hank Hill all make. That is, enough to feed a family of four. They only had high school diplomas. Sure, they're fictional, but that story was real.
Yes you do have someone to share the news, the IRS :). (Assuming you are in the USA)
Seriously though congrats!
Congrats! I had that happen a few years ago, and it is a great feeling. Cherish it! You have worked hard and earned this!
Sit and bask in that feeling for a while, you literally earned it. Job fulfilment is a big one. We spend a very significant chunk of our time working so this is a major bucket list item to check off.
Looks like the hard work paid off. Congratulations!
Congratulations on crossing that milestone! I hope you have a good budget planned and are able to save for both retirement and for a bit of fun.
Congratulations!
Dude, I feel a lot of what you're saying. I spent years making awful wages at terrible jobs, then fell ass-backwards into a six-figure career. The whiplash is really hard going from thinking you'll die young and poor into having more than you know what to do with.
With that being said, I have advice to share if you're interested in such things:
- Six figures isn't rich, but it certainly is more than enough. After this point, finding even more money isn't really going to make you much happier, so start prioritizing other important gains you can make in your career (hours, day-to-day job satisfaction)
- Focus on improving emotional intelligence. You can afford stuff now, so you can no longer hide behind notions like "this stuff isn't for poor people like me" -- you need to find actual reasons to say no to things and that requires the skill of knowing why you want something.
- Lots of problems can be solved with money, but you have to be super careful about it or you'll just end up wrecking yourself! Feeling mixed up? Don't buy self-help books -- get therapy. Feeling lonely? Don't buy friends -- take some classes at the local community center. Feeling self-conscious? Don't get a face-lift -- hire a personal trainer and maybe a stylist.
- Money guilt is real and it's OK. Use that feeling to keep yourself down on Earth. Obviously look out for #1 first -- pay off bad debt, max out your 401k, set aside enough cash to max out your insurance deductibles and still live a few months without income -- once you've done that, dial back on the money hoarding. Be better than the assholes who kept you down: tip well, give back to the people who make the things you love, be charitable. Sharing is caring.
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