Posted by Brian McCullough
I was lucky enough to see Chris Rock in concert last Friday night at Detroit’s Fox Theater.
One of his bits, funny enough, fit in with this blog. Since we’ve been talking about raises recently, I thought I’d pass along the gist of what he said, without blowing the joke.
Chris had a long bit about how Americans are addicted to spending. Yadda, yadda, yadda… And whenever we get a new raise, what do we do? We immediately go and spend that raise so that in the end, we’re just as broke as we were before… despite the raise.
How true is this? I know.
So, here’s my Chris Rock career advice. Simple really:
Next Time You Get That Raise, Don’t Change Your Budget Or Your Lifestyle At All. Don’t spend the raise.
Think about it. If you get a $50 a week raise, don’t say to yourself, “Woot! Now I can afford that better car that has payments $200 a month more than I’m paying now.”
Why? Cause if you go get that car then… congratulations. You have a better car.
But that raise is basically gone. It’s meaningless. You won’t feel it in your budget or your daily life. That $50 a week, extra $2600 a year… it’s gone.
Your life hasn’t changed, or your lifestyle. You had a car before… you have a better car now. But nothing has really changed.
Your lifestyle is exactly the same.
What if you did the opposite? What if you took Chris’ advice and didn’t spend the raise?
That extra 50$ a month would start to pile up in your wallet or your savings account.
You’d begin to notice it. You’d have extra money lying around. You could afford a better friday night out. Or a better vacation this summer.
Or, you could use it to pay off debt, which would double you down and free up even more money down the road.
In other words, if you don’t spend your raise, and you just let it soak into your daily life and daily budget… low and behold, you might actually feel richer. You might actually feel like that raise meant something. Instead of just pissed away on a quick indulgence, leaving you with the same baseline expenses you always had.