If you tripled your salary over 12 months... What changes would you make in your life?

[Terribleluck]

Over 12 months I've been able to triple my salary, the reality is that I was grossly underpaid before, the job I got earlier this was a good salary bump, but I'd say that my new salary would be appropriate if I had stayed in that line of work.

Anywho...apart from paying our debts (which are all on 0%)

What other changes in our life would be good? I've thought of finally getting a cleaner, and definitely some holidays!

But what to do with the rest? Over pay mortgage? Pension? Good old savings? Just enjoy it for a bit? (We've struggled financially for almost four years, maybe not struggled, but haven't been able to give our DC the life I'd like).

Now that you've reached this pay point, are you likely to stay at this level for a while or are there likely to be more jumps in the next few years?
Are you happy with where you live?
What things do you get stressed about at the moment? Could any of those things be improved if money was spent on them?

I'd recommend waiting until you have a good idea of what your monthly net increase is and then allocating it into different pots. Some of those pots will be long term things like mortgage & pension and another should be savings but then think about where you can spend money to enjoy life a bit more. Would that be getting a cleaner? Would it be subscribing to one of the meal delivery services? Would it be regular beauty treatments? Would it be going out for dinner once a week? Would it be spending more on a hobby or clothes or something? Would it be spending a bit more on Christmas & birthday presents? To be honest, one of the things I enjoyed most when I got a salary jump was just being able to relax a bit more as I knew I didn't have to account for very penny although I then relaxed a bit too much and realised I needed to still pay attention and couldn't do all of the things I've suggested

Wow well done op!
Enjoy the money for abit first as a family, holidays, weekends away etc
My first priority would be mortgage tbh and savings.

It sounds as if you personally have gone form c£25k to c£75k, is that broadly right?

I would look to your pension first for 3 reasons.

(1) The current rules on tax relief (which might not be around for ever) mean that in effect you are only paying 60% of your take home pay fo any contribution that goes into your penison. If your employer matches any contributions and/or you can salary sacrifice then the benefit will be even greater.

(2) if you can afford to put enough in then you can reduce it to a point at which you start to get child benefit again. This would be a big chunk of your pay though and so you have to decide whether it would be right for you.

(3) It sounds as if you've been underpaid for a while so there's a good chance that your pension is also fairly low. The earlier you take steps to increase it the more time there is for it to compound.

Of course my assumptions might be wrong and you might already have a great pension but that would be my starting point. If your salary has trippled then you can put a lot in your pension and still have a good chunk to pay a cleaner etc.

In this order:

Get a cleaner
Clear all debts, even those on 0%, it will feel incredible to be debt free
Up your pension contributions and your partner's
Over pay the mortgage a bit each month and consider moving in a year or so
Take a couple of really lovely hols and offset the carbon of any flights by paying a tree planting carbon offset organisation

I bet that will more than eat up the extra! We have lived on roughly your new income and definitely didn't feel rich although childcare was eating up loads of money at the time.

@ana yes that's broadly accurate /within proportion. I know my pension could be substantially better, my husband's is even worse...

So there's been a few questions about the house, we moved house just before the stamp duty holiday expired, so not even 3 months! We love our house. If this job is anything like my other roles in a similar company, I would expect some growth for sure. They're expanding fairly aggressively in the EMEA markets and I'm the only person in the team who can speak multiple languages. If they do grow as much as they say, then I think in a couple of years if everything goes as planned, I could be overseeing a couple of colleagues.

Photo of our garden (view from my room, which I love!)

Congratulations, OP!

As a wise mumsnetter said upthread, you outgoings always adjust to your earnings, so adapt your money habits now towards your future goals.

I would look at:

• pension (tax efficient)
• housing (if you want to move, start planning financially for the hit. If not; stash away cash in a high interest stocks and shares ISA for when your mortgage rate ends, so you can pay off more of the balance)
• future proofing. That could mean looking at a second income stream, saving for your kids university or house deposit or just replacing bits and pieces that are getting worn out (e.g. windows).

Once that's done; it's time to look at the nice-to-have options. A good holiday, the cleaner, the gardener, trips away and time off.

It sounds anal but I keep a spreadsheet of my money outgoings, so I can see what I am spending and where. It's too easy to whip your card out and pay for stuff without thinking about it and things like subscriptions quickly add up.

Well done!

@gogohm

Boring - pension & savings

Boring? When you retire at 53/56 and buy a house in France with those savings and pension draw down?

Like we just did.

Yeah really boring.

This happened to my husband, but involves him working away.

Every few months I have a deep clean (cheaper than a weekly). I also pay someone to cut the lawn every three weeks through the summer, DC have school dinners instead of packed lunch. Booked two holidays! And overpaying the mortgage by an extra 150 a month. We also save a fair bit too.

Congratulations op. Its an amazing feeling after struggling so long.

Great post! I am daydreaming and planning now...

1 - Double my pension contribution. Pay the minimum at present. My pot is average at best considering my age and I am worried about how comfortable I will be at retirement.

1. Overpay mortgage to reduce term to half.
2. Long term savings
3. Short term savings
4. Cleaner and gardener

Put loads into your pension and mortgage, it'll be so much better for you in the long run.

But personally I know I'd get sucked into more expenditure! So a cleaner, really good quality food, one big treat holiday, that sort of thing.

It definitely feels like a dreamlike state. It's definitely not just about the money, it's about recognition, career prospects, and getting my life on track (or where I would want it to be). Yes, I had 4 not so amazing years, but I'm so happy that I've landed exactly where I should have been. I'm beyond happy not just about the present but even happier of what the future will bring.

Before spending anything more id get all debts paid and get some savings. Lifestyle inflation is easy to do and hard to reverse, and you can feel locked into your new luxuries. Would you have been struggling on your old salary if you weren’t in debt, or were you in debt because it genuinely wasn’t enough to live on?

I’d make sure I had money allocated to life insurance, income protection insurance, a really good pension and investments in case I got sick of the job. I’d also set up accounts for my children to save for their education. I’d probably also spend on education or coaching for my career.

All that boring stuff out of the way, I’d definitely have holidays and a cleaner and have monthly massages and buy really great food.

Bloody well done. 🥳
If its under 150-200 I wouldn't bother with an IFA. I went through the mill with 4 or 5 a few years back when my salary jumped (40k to 120k in 2 years) all they wanted to do was sell you Pensions and charge fees to invest in s&s isas

Boring stuff

• if in debt, get out
• don't upgrade your life too much/at all. We are high earners so are our friends. a lot are now in a wealth trap where basic ongoings are 6k-8k pm.now they are having kids they are a bit screwed as that goes up to 8-12k with childcare.

We keep ours at 4k (massive mortgage and includes some of our holidays) this let's us a save a tonne which gives us options!

• Take up taxable benefits like dental and health. My dh has private dental, so do I. He is on my plan not his. He had dental work this year that cost zero on my plan and would have cost him on his plan about 1.5k
• Pensions - super tax efficient and they are pulling up the drawbridge on this pay in while you can. You have a 40k allowance, unused allowance can be carried for 3 years.
• s&s isa for you and DH will suck up 40k pa in savings
• if you like the companys future don't touch your shares or RSUs. Buy depending on how much equity you get it may be better to sell to sell some at intervals to release profit but stay under capital gains threshold.
• get a cleaner by all means, we have had 6 in 2 years, all without fail terrible and 1 was a thief . we do it ourselves now as it was more trouble than it was worth and added to stress not reduced.

fun stuff

• if you want to upgrade house or move 100% do. We consciously used it to jump the ladder and went from a 2 bed flat to 5 bed house in one go!

(this worked for us as we saved time and stamp duty money on living in a 3 bed semi for 4 years inbetween). We did this before trying for children. And our house is 🤩 I love it so much, now we are having kids we'd struggle to get a house this nice as the mortgage payments would be much higher

• holidays. we go on really nice razzle dazzle holidays. 1 week skiing, 2 week big holiday 1 week winter sun and 3-5 long weekenders. Its amazing.
• we spend a lot of time going and doing nice things and experiences. We have national trust memberships, go to the theatre, galleries and a lot of amazing restaurants.

Enjoy it so so much.
I had a financially uncertain childhood and i am so grateful and happy about the security my career has brought to my life.

Oh and I get an hour massage once a fortnight (f I ever leave DH it will be for masseuse she is amazing 🤩 )

Congratulations OP! We had a similar thing (over a few years not all in one year). We prioritised paying off the mortgage a bit, then we saved for a significant extension as we didn't want to move house. That was a few years ago so we now have our eye on uni fees for the DC and then looking towards early retirement. And yes yes to a cleaner and a new car!

@bowling I only got into debt because I was made redundant at the very exact point of contract exchange for my house. The savings we originally had were for the normal aftershock of buying a house, not buying a house and losing my income at the same time!

I've been on this type of money before and I agree, it easy to get used to it, but because I also went through a phase of basically no luxuries is that now I can distinguish what's worth spending on and what isn't.

A million streaming subscriptions - definitely not worth it.

Latest games consoles for the kids - not worth it.

I thought that going to Waitrose was the pinnacle of my domestic happiness, but lately I've figured out it definitely doesn't matter.

I thought that going to Waitrose was the pinnacle of my domestic happiness, but lately I've figured out it definitely doesn't matter.

Correct.
Several of our friends were slack jawed when DH "revealed" we shop at aldi 😅
One of his friends actually said "but why?"

I haven't paid retail price for clothing in a decade or more. If its not on sale I won't buy it. DH is similar now and it slightly appalled that he used to happily wander round tedbaker and reiss dripping ££££s on plain bloody blue and grey jumpers

How about applying a 'rule of thirds' to the extra money?

A third on 'the past' eg clearing your debts, overpaying the mortgage etc.
A third on 'now' so lifestyle like holidays, nicer food, a cleaner, etc. if you need a car, and do the mileage to make it worthwhile, how about an electric car?

A third on 'the future' ie pensions, which will be very tax efficient for you, so always a good plan, or other savings/investments if you don't want to tie up the money until you can access it.

Once you're debt free, you could go 50/50 on now and the future, but as you say you can distinguish between what is and isn't worth it to you, so probably aren't at risk of spending for the sake of it, or simply because there is money available, you could just spend what you like, but keep an eye on the money you are saving, so you're still making progress with this, so will be building up assets, and have money available for major purchases like home improvement or car replacement.

Or you could start to think about scaling back at work, going part time etc.

Pension, mortgage. Start saving for uni fees.

I would buy zero waste meat and veg. We’re almost there with veg but with mean I can afford the extra atm

Fix all the little niggles in your life (storage solutions etc.), make your daily lives look how you want them to look and all that. But make sure you put some of that money to work! Investing is very accessible these days.

I’d prioritise:

Pension, pension, pension
Investments & savings for DC future
Cleaner
Making my house and garden nice for a treat
Upgrading from Sainsbo’s to Waitrose 👌🏻

Our house needs a new roof, plastering and repainting upstairs where we have leaks. We'd get all that done and then decide if we wanted to move.

Also, we wouldn't be watching the pennies so much when buying food, so would have more fish and variety of fruit.