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What should I do with my money after getting a raise?

Answer

Decide where the new money goes before it hits your account, or it will quietly disappear into nicer everything. A clean rule: bank at least half the raise toward savings and investing, and let yourself enjoy the rest. Concretely, bump your 401(k) percentage so part of the increase goes pre-tax automatically, top off your emergency fund if it's light, and direct some toward your highest-rate debt. Lifestyle can grow a little – that's fine – just intentionally rather than by default. The reason this matters: raises are the single biggest lever for accelerating wealth, but only if they raise your savings rate, not just your spending. Adjust your automatic transfers the same week the raise takes effect so the higher savings happens without ongoing willpower.

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