I Just Scored a $70K Promotion: How Do I Avoid Lifestyle Creep for My Daughter’s Future?

There’s just something exciting about hearing the words “promotion” and “raise” at a job you have worked tirelessly for years. What used to be commonplace is now less of a realization than most people realize, and it’s made job-hopping the smart strategy to boost your title and salary. 

However, in the case of one Redditor posting in r/perosnalfinance, they got the news they had been hoping for after six years. Having interviewed for a role five times previously, they are now going from a salary of just below $45,000 or approximately $22 an hour to a salary of $70,000, a giant increase in their life. 

Along with all of his happiness, he is concerned about what this increase means for his daughter, as they have worked hard this whole time to make ends meet. 

The Situation 

In this case, you have a Redditor who only has a high school education and as a result, he’s felt stuck in his $22-hour job, having interviewed for the purchasing agent role and been rejected five times before. 

Luck and skill were on his side this time, and he got the role as the sixth time was the charm. As a result, he is going from $22 an hour or around $45,000 per year to a salary of $70,000. Having lived in a one-bedroom with his 10-year-old daughter where she sleeps in the bed and he sleeps on a sofa, he understandably wants to give her a better lifestyle. 

The challenge is that while he wants to give her some lifestyle perks due to this raise, he wants to avoid what he calls “lifestyle creep.” Of course, his reason for pursuing this raise was to give his daughter a better life, so he feels conflicted about what he wants and should do. 

First Things First

Even with this raise, the comments on the post almost universally agree that this individual and his daughter should stay in their one-bedroom apartment. The primary focus should be putting away money for an emergency fund and saving for things he mentions, like nicer clothes, a vacation, and even some extracurricular activities that are not the “cheapest” for his daughter. 

My initial concern is echoed in the second comment, as I think this Redditor misunderstands “lifestyle creep.” In reality, lifestyle creep is more about increases in spending as income rises, which adjusts your mindset to believe that things that were formerly luxuries in your life are now necessities. 

Wants Versus Needs

The Redditor should consider wants versus needs, starting with a two-bedroom apartment. While a two-bedroom apartment isn’t a need by any stretch, it’s a want that can be delayed for now. The same can’t be said for building an emergency fund, which should be done before moving any apartments. 

The same can be said for looking into a 401(k) account if you are now a salaried employee at this company. Yes, this would mean that some of the increased salary would go toward retirement, but it would be highly beneficial to do so and think of the long term. 

The original poster should also consider a 529 account to provide money for his daughter and a future college education. As a high school only graduate, it’s a safe guess that he might want his daughter to go further educationally than he did, which is why a 529 account would be so beneficial. 

The bottom line is to ensure that any lifestyle improvements are within your budget and not to go over it just because you have more money in your bank account. 

Kids Activities

As someone who spends money on kids’ activities, I can relate to how expensive they are, but the poster should get started by researching what his daughter wants to do versus the costs. There is no reason to rush and spend any of the money you have received immediately, but if you are talking about spending an extra $50 or $100 per month so your daughter can do an activity she might love, it’s worth the cost. 

In this regard, I don’t necessarily agree with a few Reddit comments that tell you to stop before spending anything. It’s not that I don’t believe this is good advice, as this raise does put the Redditor into another tax bracket, so he has to remember it’s not $25,000 more in his paycheck every month (split between paychecks). However, this doesn’t mean he can’t do something great for his daughter right out of the gate. 

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