Got a Raise? Reasons not to increase spending.

Got a raise? I know this advice is going to suck… but, you’ll be convinced. Most people including most financial planners will at best tell you to save some part of it for investing and use the rest to spend as you like. Not good advice.

The Trap of Social Comparison (Keeping up with the Joneses)

The Equation for Financial Freedom

Monthly expenses * 25 to 30X = Financial Independence

Lifestyle Creep vs The Science of Wellbeing

So, when you get that raise, don’t fall victim to lifestyle creep. Don’t give in to mindlessly increasing your monthly spending. Instead, put 100% of that raise into investments. The only exception is if you’ve not yet met your basic needs: food, water, and security. Short of that, the prospect of financial independence is a much better deal than increasing spending and tying yourself to hazardous modern day working conditions for decades on end leading to disease and health problems.

Yes, Celebrate! No, Don’t Increase Monthly Spend

I didn’t say you shouldn’t celebrate. Maybe you got a raise and want to celebrate that with you friends and family. Ok. The problem comes when you increase your standard of living. It’s a problem when you add more spending on a monthly basis. Spending once to celebrate or reward yourself in some way is different since you will not have increased your month to month spending.


Happier. Healthier. Wealthier... Video Series