New job - great money - what to do?

[snowbirdpat]

I have just landed the job of my dreams starting in two weeks. I will be going from $12.50/hr to $18.50/hr for doing basically the same thing that I'm doing now. I'm thrilled beyond belief, but was thinking - what do I do with all this extra money? First I will pay off my last credit card, maybe buy some decent office clothes and then save, save, save. The funny thing is - some of my friends are pushing me to go on a huge spending spree! "You can't take it with you!" Well, I'm 55 and looking towards retirement in 10 years, so I don't think things will change that much. I did, however, buy a bottle of wine to celebrate last night!

[leslieann]

Congratulations! Wise of you to notice that you don't actually HAVE any extra money yet. Isn't it interesting how "friends" want us to spend?

I hope the new job is all you want it to be, and that you love living debt-free!

Leslie

[herbgeek]

The first thing I'd do would be to change my automatic deductions so that most of this extra money automatically goes into some sort of saving or investment, so I never get used to spending this "extra" money. When I was younger, I would channel at least half of every raise into savings, so I never got used to a higher level lifestyle. (Now the habits have stuck, and I don't need this artificial way of saving.) And if retirement is less < 10 years away, you might not want to get used to a higher lifestyle either.

[Jonathan]

After you've had the job a year and think it's a keeper, then throw a *small* party and invite your friends. Until then, you're test-driving this job. Tell your friends that; it's none of their business what you spend on, really.

I've been in the position of taking a new job, only to find out the position was untenable in the long term, and having to jump ship shortly after the 1 year mark (with barely any savings, but debt-free).

[bicyclist]

I would dissent a bit from the other responders. I think that it is good to indulge yourself a little once the additional pay comes in. Buy things which have been on your shopping list or something special, enough to feel rewarded for your efforts. That makes it easier to set up and carry out a savings plan instead of feeling deprived.

Congratulations on your raise. That's not easy to do in this economy!

Sincerely, Bicyclist

[snowbirdpat]

Thanks for the responses everyone! Also, I will go from being paid once a month to being paid twice a month. This will take some getting used to, so I think I'll just park the mid-month pay in the bank and let it ride 'til month end 'til I figure out what I'm doing. Really excited and looking forward to the change.

[jrb3]

Congrats, Snowbirdpat! Sounds like you're well-grounded for this transition.

I'm reminded of an acquaintance's retort to "You can't take it with you": "Yes, but not having it *can take you*!"

[Madsen]

Being that your handle is snowbirdpat, is that a lifestyle you currently practice, or one you aspire to? If it's a lifestyle that you have yet to implement, you could channel a good chunk of the raise into a "snowbird fund" -- earmark it specifically for buying a 2nd residence or in another way that gets you closer to that goal.

[ApatheticNoMore]

Of course you may be unpleasantly surprised about how much goes to taxes :P Still they'll allow you to keep some of it, so save some and spend some.

[loosechickens]

o.k. to indulge in a few, small pleasures, but at age 55, best of all to have the increased salary removed and automatically deducted into a savings or investment account, and just continue your life as before. You don't have a lot of work years left to add to retirement savings, so this windfall of increased salary is really a chance to improve that situation.

Congratulations on the new job, though........just adding up how much you could add in a few years to your retirement savings by ignoring that additional amount of money and saving it instead might give you much more real pleasure than anything you could buy at the moment, although a few enjoyments are certainly in order, as well as a small celebration or two.

[Gina]

o.k. to indulge in a few, small pleasures, but at age 55, best of all to have the increased salary removed and automatically deducted into a savings or investment account, and just continue your life as before. You don't have a lot of work years left to add to retirement savings, so this windfall of increased salary is really a chance to improve that situation.

Spot on. In a new job, you have no idea how it will pan out. (Congrats by the way.) I'd suggest you save as much as possible for at least the first year till you see how it goes. If you save, and things go very well, the money will still be there to spend later. And you will have time to decide how to spend it wisely, unless you like the feeling of security a nice balance brings you. ;)

If it's the 'job of your dreams', coast on that aspect awhile. The more you save now, the earlier you can retire. :)

[frugal-one]

ditto... buy some some "celabratory token" and live as you have. It will be nice to have that larger nest egg!