Chief
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Chief
Well, after taxes, it might be about $60K. I'd pay off my car (mortgage is already paid off) and get some much-needed work on my house done.
Chief
I forgot taxes. Guess that vacation just got a little less fancy...
Rising Star
If I has any debt, pay it off. Buy myself a few items I wanted, but nothing big I wasn't already planning to buy. Save the rest. Year 2 ( assuming this is ongoing) I would plan my epic vacation. Epic takes time to plan. And may not be the best look your first year. But most importantly, I would not change my lifestyle and allow it to eat up that raise.
This also depends on where you were prior to the 100k raise. 20k part time while in college to 120k is very different from $120k to $220k.
CS1, glad to hear this about the mortgage. I hate having debt and am on track to pay off my mortgage in about 5 years, even though I think we could maybe do better in the long run investing that money. I just feel like having no mortgage would lead to a relief that’s priceless, and it seems like that has been your experience. Would be curious to hear more.
I would stop taking drugs
Chief
How does the money help that? I hope everything looks up for you, my friend.
I'd talk to a financial advisor. Today's money can grow if you do the right thing now.
Chief
I should probably be doing that anyway, come to think of it.
I'd be sure to have a budget.
A raise means continual increased income, so yea 100% invest and "pay yourself first".
Pay down high interest debt, such as credit cards/loans, but not mortgage.
diversify, if you don't have a mortgage, I'd consider it if you can afford it unless you have concerns about the housing market, then invest.
Then yea finally put some aside for a nice vacation, to get such a raise you earned it, enjoy!
The main thing to consider about home buying (in the US) is that you get a tax break on the interest. If your income increases significantly this can help offset taxes on that income.
This is where some kind of personalized planning would come into play since everyone is different. As said above, just paying off a mortgage might be worth it even if you effectively cut off the mortgage tax break. Put a number on it and decide.
(There's also other ways to diversify)
My Bonus + RSU vest annually is a little north of that and I just save and invest it almost every year.
I know it’s more financially savvy to pay off debt (Just a car and some leftover student loans) but having a huge savings cushion provides me with a level of security that I cant resist.
Chief
The huge savings cushion was so game changing. I will say, being debt free was also huge too. The combo relieves stress I didn't even know I was carrying.
I’d buy a boat.
Chief
I'm trying to embrace that mentality too- like I want to build and save for a secure future and legacy, but I also want to have some amazing memories with my kids. We're taking a big trip to disney later this year, and I know the money could also contribute to a college fund, but I think there's a huge value to building memories too.