I got a huge raise
<div class="user-question">I’m starting a new job that will pay me significantly more than I make today (a 60K increase in salary). How do I make the most out of this raise and make smart money decisions without blowing my money pointlessly?</div>
First of all, congratulations on the new job and the raise! $60k is no small feat. The fact that you're asking this question before the money hits your account, instead of after you've already hit “buy now” on everything in your Revolve cart, is already such a great sign.
Because let's get real, here's what tends to happen: the offer letter lands, your brain immediately starts spending money that you don't have yet, and suddenly the Dyson air wrap you've been eyeing for the last six months feels less like a splurge and more like "I earned it." You did earn it, but let’s take a beat.
What even is $60k?
Not to be a downer, but this is your raise before federal and state income taxes. Depending on where you live, up to 45% could go to the government, bringing your raise down to about $35-40k if you’re in New York City. Split that across 24 paychecks (assuming you get paid twice a month), and you're looking at roughly $1,400-$1,700 more per paycheck. Still great, just a more honest number to plan around than the one on your offer letter.
The next thing you should know about is lifestyle creep
You might assume that the people living paycheck to paycheck are the ones making the least. However, a 2025 Goldman Sachs survey found that 40% of people earning over $500k a year are living paycheck to paycheck, and 41% of those earning $300k to $500k. Can you guess the group that's doing best? Surprisingly, it's people earning $200k to $300k, where only 16% said the same. (As cited in Fortune)
Translation: The more some people make, the more stretched they tend to feel. That's what’s called lifestyle creep. Every time your income increases, your cost of living rises to meet it in the background. New job = nicer apartment. Bigger salary = upgrading to Economy Plus. Suddenly, what used to be "nice-to-have" becomes your new baseline that you can't imagine living without. It happens gradually enough that it never feels like a decision, until one day you realize you're making significantly more than you were five years ago, but your savings are no better off.
So how can you make your raise work just as hard as you did to get this new job? Here's how we'd think through it.
1️⃣ Step one: Pick your thing
We're not going to tell you to bank the entire raise and change nothing about your life. That's not realistic, and nor is it even the goal. Instead, think about what you're currently squeezing uncomfortably in a way that's costing you something, whether it's energy, time, or peace of mind. Maybe it's splitting a cramped apartment with two roommates when you're craving a space where your bed doesn't touch three walls. Maybe it's the flight you always book with two layovers to save $100. Maybe it's waiting three hours at the laundromat every Sunday when a wash-and-fold is right next door. Pick the one thing that would make your life meaningfully better and let yourself upgrade. You deserve it! But make it intentionally, and name it before doing it, instead of letting several small unnamed upgrades sneak in on their own.
2️⃣ Step two: Put everything else to work
Once you've decided where you're going to ~live a little~, the rest of your raise shouldn't just sit in your checking account when it hits twice a month. Send it somewhere where it can work too.
If you don't have a high-yield savings account yet, start there. Right now, HYSAs are paying somewhere around 3.5-4.2% APY (compared to the ~0.4% national average at a traditional bank).
If an emergency fund covering 3-6 months of expenses doesn't exist yet, that's the first thing this money should build. It might sound boring, but it's also the difference between a surprise expense being inconvenient vs. being a crisis.
If you've already got that covered, your raise can get up to something a little more interesting - maybe increasing your 401(k) contribution, maxing out a Roth IRA, putting new dollars into a brokerage account, or even approaching alternative investments (this is what we’re all about at Girl Math Capital!). The most important part of whatever you decide is to AUTOMATE IT. Yes, we put that in all caps because automating it is the easiest way to make sure it gets where you want it to. Pick a percentage of your new income, set it, and forget it. That way, you’re not consciously deciding whether or not to maintain the habit every single paycheck.
Closing note
Congratulations again. A raise like this is an opportunity, and your future self will thank your present self for treating it like one. Before your first day:
- Name the one or two upgrades that would meaningfully improve your life, and let yourself have them without guilt.
- Decide where the rest goes - savings if you're still building your foundation, investing if you're not - and automate it before you see it.
- Check back in with yourself in six months. Did your lifestyle creep up anyway? That's useful information, not a failure, and it’s never too late to make an adjustment.
The goal isn't to save every extra dollar, but rather to make sure that a year from now, you can point to exactly where this raise went, instead of wondering.
Found this valuable? Here are some more deep dives from the Frich team 🤝
✅ Strategies for getting a raise
✅ What am I supposed to do with my salary?
Congratulations,
Emma Usich, Porter Geer & Serena Ainslie Co-Founders, Girl Math Capital
