Recently started a new role, comes with a good TC boost (30% increase in base + signing bonus and stock). I’m wary of lifestyle creep, for now I’m still living as if I’m on my old base salary and just putting the excess into HYSA and VTI. I’m thinking of potentially upgrading apartments in the summer and a wardrobe refresh, and giving some to my parents, but nothing planned beyond that. Is there anything I should definitely consider upgrading/definitely not upgrading? And what are some common lifestyle creep pitfalls to look out for? Old TC: 155k New TC: 265k
Save/invest all the extra money.
If you don’t need it, don’t do it. Allocate some salary for extra expense but don’t go over board
ignore these people on blind, they live such sad lives and can’t take their $ to the grave. Reward yourself for getting you new job. Enjoy the higher pay for a month or two by doing the stuff you listed above. Then reassess your budget.
This. +1 All the expenses you mentioned are completely justified. I have friends who buy Porsche with <100k salary and they live a wonderful life. I earn thrice as them and not 1/3rd as happy. You’re not working to be rich. You’re working to be happy.
You can't take your money to the grave. But you can give your kid the ability to get a PhD in art history and still live comfortably if they want it because of an investment machine
I live off about 40%-45% of my total gross income. I do splurge on occasion bc I want to enjoy life while I’m still young and healthy
You should do the opposite of a lifestyle creep and start wearing Depends.
Redirect all extra pay to a separate account which requires password entered by both you and your spouse. And make sure that money gets DCA’ed to an index fund. Then, continue to live life like you used to.
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I would say those are all lifestyle creep items. Just invest and continue as usual. It helps to be working towards a long term money goal. Explain the parent situation?
Just a nice thing to do. They can use it for a vacation perhaps
Well, create a yearly budget for gifting then and come up with a number that makes sense for your long term wealth goals