11% Raise @ work

[dullard]

Congrats as well. I'll say one thing that should be obvious. In order to actually have those meaningful savings, you have to actually save. That raise works out to be roughly $13.60/day after tax. If you go out and celebrate the raise with a $95 meal (pretty easy to do in NY) you just blew your whole raise for a week in one hour.

Find a way to put it somewhere where you can't see it. Try bumping up your 401Ks by a total of $1000/month. Not only will you actually save the money, but you also get tax savings.

 

[vi edit]

Unless you live in any city with more than 30,000 people in it, in which case 250K will leave you starving in a 200 sq. foot apartment with no heat or hot water.

I live in a city of about 150,000 people and live in a $54,000 house that's about 800 sq/ft and has heat, hot water, AND central air conditioning.

 

[vi edit]

Find a way to put it somewhere where you can't see it. Try bumping up your 401Ks by a total of $1000/month. Not only will you actually save the money, but you also get tax savings.

....this

Taking my 401k from 10% to 15% made no real siginificant difference to my take home pay. And then a year later when I took it from 15% to 20% it still didn't feel like I was "missing" it. I don't make as much as the OP, but it's not drastically far off from him.

 

[InflatableBuddha]

Wow, congrats!

I'm getting a raise this week, but it's only going to be between 4-5%.

 

[Vonkhan]

Congrats as well. I'll say one thing that should be obvious. In order to actually have those meaningful savings, you have to actually save. That raise works out to be roughly $13.60/day after tax. If you go out and celebrate the raise with a $95 meal (pretty easy to do in NY) you just blew your whole raise for a week in one hour.

Find a way to put it somewhere where you can't see it. Try bumping up your 401Ks by a total of $1000/month. Not only will you actually save the money, but you also get tax savings.

Yup, a choice between bumping up a 401(k) or starting off a college fund for my kid, thanks We are celebrating - proportionately to the raise, which - for us, is donating a little extra cash to the ASPCA and a local no-kill shelter. A while ago we figured out that giving to charity brought us more joy than any lobster and wine dinner.

 

[dpodblood]

What is OP's line of work? I am always curious in threads like this.

 

[vi edit]

Yup, a choice between bumping up a 401(k) or starting off a college fund for my kid, thanks

Also a good choice. When my daughter was born (30 months ago) we set up an Education IRA through the College Iowa Plan. I've got a couple funds bought that market index funds. We put $150 a month into it and it's already close to $5,000. She's also sitting on around $2500 in savings bonds that family members have bought for her for Christmas/Birthday gifts. She'll be sitting on almost $10,000 for college by the time she's three. :O

Hopefully I won't have to take out a second mortgage by the time she's ready to go to college.

 

[Vonkhan]

What is OP's line of work? I am always curious in threads like this.

I work in advertising (online) for a national financial publication

 

[JS80]

I work in advertising (online) for a national financial publication

Your salary sounds low for location and industry. What's your function?

 

[DesiPower]

Good! Congrats! it will make up for the extra taxes starting next year

 

[CRXican]

aaah, u meant exact $ amount? No, not $250k In the $85k+ range now ... still young

screw you

 

[bfdd]

You couldn't save any money making $75K? That seems crazy unless you have kids or something.

I used to make that much and it was hard as hell to live, well being 21 and making 75-90k a year isn't really a good thing anyways. Way to much disposable income. Vegas sure was fun though.

 

[Vonkhan]

Your salary sounds low for location and industry. What's your function?

Coordinator $85k is base, also a %age of ad revenue (not as much as sales reps. but still a decent amount), Q-ly bonus, holiday bonus. Also get 18 days vacation (score!) and usual benefits.

Salary.com says I'm doing good

 

[dullard]

Also a good choice.

I wouldn't say it is so cut and dry as being a good choice. While it is nice to have money for college, there are drawbacks. The main advantage of a specific college plan is that usually you save a few percent of state income tax. But in most states, that is not very much (5%-10%). The drawbacks can dwarf those meager benefits:
1) Child might not attend college (half don't, and 75% never get a degree).
2) Child won't qualify for nearly as many grants/scholarships if there is a college savings plan (could be throwing away many thousands of free dollars).
3) Child may realize that he/she doesn't have to work or earn the degree (Daddy will pay for it).
4) You yourself might be financially harmed (especially if it is at the expense of a 401K).

I say, take care of yourself first FULLY ($16.5k for 401k + $5k for Roth/IRA = $21.5K per parent = $43k/year savings). Then, if there is leftover money, set aside some for the unlikely chance that the kid will need your college money. Not too many people can meet that take care of yourself first bar though.

 

[JS80]

Coordinator $85k is base, also a %age of ad revenue (not as much as sales reps. but still a decent amount), Q-ly bonus, holiday bonus. Also get 18 days vacation (score!) and usual benefits.

Salary.com says I'm doing good

85 + commission is a different story...

 

[vi edit]

The IRA is in my name, so it counts against me and not her. And we are going to be in such a high income bracket anyway that we are going to get no mercy when it comes FASFA time. Since we don't live in Iowa we aren't getting the state tax break, but we do get the federal income tax exemption if it's used for education costs. If our kids never go to college, or get a free ride I simply cash out and pay the long term capital gain taxes on it. It's basically a Vanguard backed mutual fund account.