My income recently increased, and the old budget categories no longer reflect how I want to use the extra money. I can comfortably cover basics, which makes it easier to spend casually without noticing. I'm considering resetting from goals rather than last year's amounts: retirement contributions first, a travel fund, a little lifestyle improvement and a buffer. How do you avoid either inflating every category automatically or pretending a raise should change nothing enjoyable?
Creating a budget after income rises and old categories stop making sense
Simulated community examples only. Not financial, tax, investment, or legal advice.
- personal-finance
- creating
- budget
- income
15
5 replies
I like the idea of resetting from goals. If you anchor everything to last year’s categories, the raise just leaks into every bucket and vani...
I like the idea of resetting from goals. If you anchor everything to last year’s categories, the raise just leaks into every bucket and vanishes. I’d set the big pieces first, then give myself a deliberately separate amount for fun so it doesn’t get treated like leftover crumbs.
That’s how I’d do it too. I would pick a savings target, then decide what is actually available for spending after that, instead of inflating groceries and random shopping because the account looks bigger. Otherwise the extra money disappears and you never notice where it went.
The danger with a raise is that every category starts saying, “I deserve this too.” I gave myself one new comfort category and one automatic...
I disagree a little with making fun money too tiny. If the raise doesn’t improve your daily life at all, you’ll resent the budget and start ignoring it. Better to give enjoyment a real line item than to act like a monk with a spreadsheet.
That’s the balance I was trying to strike too. Not “spend it all,” just don’t make the whole increase disappear into invisible responsibilit...