> ## Content Index > Fetch the complete content index at: https://www.indykarveli.com/llms.txt > Use this file to discover other available public pages before exploring further. # What to Do With a Raise - URL: https://www.indykarveli.com/what-to-do-with-a-raise/ - Published: 2026-08-13T14:00:00.000Z - Updated: 2026-08-13T14:00:00.000Z - Author: Indy Karveli - Tags: Money, Articles, #Import 2026-10-03 18:23 Getting a raise is a genuine opportunity, but how you handle it largely determines whether it builds your wealth or simply disappears into a bigger lifestyle. The moment of a raise is one of the most important financial decision points there is, and most people waste it without realizing. Here's how to handle a raise wisely. ## The trap: lifestyle creep The most common thing people do with a raise is unconsciously spend it. The extra income arrives, and spending quietly rises to match, a nicer apartment, more dining out, small upgrades. Within months, the higher income feels normal, and the person is saving no more than before. This is lifestyle creep, and it's why many people's wealth doesn't grow even as their income does. The key insight: a raise is only a wealth-building opportunity if you *don't* let it inflate your lifestyle automatically. The money has to be directed deliberately, or it will vanish into a more expensive life. ## The powerful move: bank a large share of it The single best thing you can do with a raise is to direct a large portion of it, ideally half or more, straight to savings and investments, before you adjust your lifestyle: - You were already living on your old income, so redirecting the raise is painless. You're not cutting anything. - Because you never adjusted to the higher spending, you don't miss it. - The money goes to work building wealth instead of inflating your baseline. This single habit, letting raises widen your *gap* rather than your *lifestyle*, is one of the clearest dividers between people who build wealth and people who just earn and spend more. ## A practical approach: decide in advance and automate The most reliable way to handle a raise well is to decide *before* it arrives and automate the decision: - **Decide the rule now:** "When I get a raise, at least half goes straight to savings/investing." - **Automate it:** When the raise takes effect, immediately increase your automatic contributions to capture it, before it hits your spending. - **This removes the in-the-moment temptation**, the decision was made in advance, when you were thinking clearly. By pre-committing and automating, you capture the raise for wealth-building before lifestyle creep can claim it. ## When spending some of a raise is fine Handling a raise wisely doesn't mean saving all of it: - **If you were genuinely stretched**, using a raise to reach financial stability, covering necessities more comfortably, building an emergency fund, is healthy, not creep. - **Enjoying a modest portion** of a raise is reasonable, you've earned some reward, and a sustainable approach beats extreme deprivation. - The goal is to avoid spending *all* of it automatically, not to spend *none* of it. A good rule: cover any genuine needs first, enjoy a small portion, and direct the majority to building wealth. ## The compounding impact Handling raises well has an outsized long-term effect. Because raises tend to come throughout a career, consistently directing a large share of each one to investments, where it compounds over decades, can dramatically increase your eventual wealth. The person who banks their raises ends up in a completely different place from the one who spends them, even on an identical salary path. ## The honest limit This guidance assumes a raise beyond what you need for basic stability, for someone who was genuinely struggling, using a raise to reach a secure baseline is the right first priority, not a mistake. And "save half" is a useful default, not a rigid rule; the right split depends on your circumstances, goals, and how stretched you were. This is general guidance, not personalized advice. But the core principle is well-supported and powerful: raises are a prime wealth-building opportunity that most people waste through lifestyle creep, and deliberately directing a large share to investing, decided in advance and automated, is one of the clearest habits separating wealth-builders from everyone else. --- *The Selfmade Newsletter: one idea every Friday on what self-made people do differently. Free, on Substack.* [*Join here*](https://www.indykarveli.com/newsletter/)*.* *This article is for education only and isn't financial advice. Returns are never guaranteed.*