MONEY DECISION GUIDE
What Should You Do With a Pay Raise?
Give new recurring income recurring jobs before lifestyle costs absorb it.
Reviewed and updated September 3, 2026 · About 2 min read
A practical way to decide
- Compare the old and new take-home pay so you plan with the increase that actually reaches your account.
- The IRS recommends checking withholding after a major income change. Its estimator can help employees review federal withholding.
- Protect current essentials and minimums, then decide whether your cash reserve needs reinforcement.
- Review any employer match and costly debt before assigning the increase to longer-term saving and other goals.
- Keep a deliberate flexible portion if it makes the plan sustainable. You choose the amounts and move the money yourself.
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Browse every money guide →Educational planning only—not individualized financial, tax, investment, or legal advice. You review the plan and move your own money.