How Our Budget Changed When I Got A Pay Rise

In the middle of April, I changed jobs to both a new company and a new level of job role. I’d been at my previous job for three years and I was ready for a change, a challenge and for the level I knew I was ready for. Along with the new role itself, I did get a pay rise which was much needed with the prices of everything going up.

Unless you’re promoted pay rises within a job can be hard to get. The annual ones you may get automatically are usually so small they’re not even worth talking about. And I’ve never managed to successfully agree on a pay rise while staying in the same job. This was nothing against me and my justification, the companies just made it very hard to push for one and rarely gave them out. So the only way I’ve increased my pay was to move companies and roles.

A pay rise can lead to lifestyle creep

It’s so easy to experience lifestyle creep when you get a pay rise and before you know it you don’t feel like your pay has increased. So if your take-home goes up by £200 a month, over a few months your spending goes up by £200 a month so you don’t feel any better off. Then you’ll feel like you could never cope without that extra money.

Previously I’ve always said to operate on a 50/50 ratio with 50% going into savings. You won’t miss the money as you never had it to begin with, but over time it will add up. Then the other 50% is for you to do whatever you want with. It might be a treat for the household to enjoy every month like a subscription service, or it might be extra spending money as a congrats for the new job.

Here’s how our budgets changed with my pay rise.

Started up some new savings pots

There are a few savings that I put away from the freelance money that I make from this blog. But I’ve always said I don’t want to rely on this money so I moved one of the savings to now come out of the extra money I make from my job.

This is a win-win as it means I know the savings is always covered, and if I still make the same freelance money I have extra for other things.

We had to up our food budget with my pay rise

One of the negatives from leaving my old job was I used to get a 15% discount on our Ocado shop. This brought the prices of most things down to the same as I’d pay in Aldi and Lidl so we used to do it everywhere. Now we’re used to the delivery and love the products and service offered we want to continue getting it.

So we’ve had to up our weekly food budget a little bit to cover the discount we’re no longer getting. To not spend too much money we have moved our deliveries to bi-weekly. We get a big order every other week and max out our food budget. Then we do a smaller shop at a store in the middle week for fresh bits like veggies and bread, and anything we desperately need.

A small increase in spending money

I didn’t want to just spend all of the extra money I earned but I did up our spending money a little bit. It just gives us a few extra pounds to spend in whatever way we want.

Luke gets his spending money monthly whereas I choose to have it split and paid to me weekly. I find it’s easier to manage and there’s less temptation to just spend it all. I work on a zero-based budgeting method with this month so each week I always know where it’s all going to go. This may go between sinking pots for meals out, shows or whatever I have coming up, but also some actual spending too.

Our pay rise household treat

We’ve talked about getting Sky for the longest possible time and thanks to my pay rise we’ve managed to sign up for a package.

As a household, we watch a lot of TV and movies, and we both absolutely love Formula 1. The sports package did add a bit of money but it’s worth it for the F1, and Luke enjoys watching golf as well. We also opted for Sky Movies and a few add-ons such as HD and Sky Stream so we can watch in our bedroom as well.

It ended up being the perfect timing as our old broadband package had come to an end so we added Sky broadband and have saved money on that.

How would you change your budget if you got a pay rise?

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