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Receiving or Anticipating a Big Raise? Here Are The First 5 Prudent Financial Decisions You Should Make

By November 4, 2025May 6th, 2026Insights

Receiving or Anticipating a Big Raise? Here Are The First 5 Prudent Financial Decisions You Should Make

Naturally, you’re passionate about what you do and strive to give your best to every project. And when your employer notices the value you bring to the company, it makes you feel good. But, the minute your employer rewards your contributions with a sizable raise or bonus, that’s when all seems right in the world.

The problem is, too many employees make poor financial decisions after getting a juicy raise or sizable bonus. Before they know it, they’re on a car lot looking to buy a new vehicle. Or they book a lavish family vacation they would have never considered on their previous salary. Maybe they even splurge on some jewelry, fancy furniture, or toys, such as a golf cart or ATV.

Before they know it, they’re upside-down in their finances and in a worse predicament than they were before. Instead of raising their standards of living, that raise actually brings them closer to poverty.

In this blog post, we will show you exactly what to do when you receive a generous raise. A focused plan keeps the raise working for you. The ultimate goal becomes turning income growth into lasting wealth.

5 Action Steps You Should Take After Receiving A Raise

After receiving a significant raise, your next paycheck may seem like a mini lottery win. Sure, it will “feel” like your financial situation just took a giant step forwards. Truth is, if you immediately try to change your lifestyle by making foolish financial decisions, it will “feel” like you’ve taken a step backwards.

Here are the first 5 financial decisions Black Diamond Advisory Partners suggests after a big raise.

1

Action Step #1: Update Your Monthly Plan.
Almost immediately, you should reallocate what finances go where. Set a new savings target. Decide what percentage of your new income should go towards savings and investments.
2

Action Step #2: Boost Your Retirement.

Think of your raise as raising your retirement. Sure, a little can benefit you today, but you’ll want some to go towards your future. Start with your employer match, then raise your 401(k) deferral rate. If you are eligible, consider additional options like a Roth IRA.

3

Action Step #3: Check Your Tax Picture.
Did your raise put you or your family into a whole new tax bracket? A raise can shift brackets, phase-outs, and withholding. Don’t fall victim to a surprise at tax time.
4

Action Step #4: Buildup Your Cash Reserve.
Expect the unexpected. A freak storm that damages your roof. A sudden hospital bill. Even a job change. A strong liquidity cushion protects your financial plan.
5

Action Step #5: Aim Towards a Goal.
Only after you improve your cash reserves, increase savings, and reallocate investments, should you consider your ultimate financial goal. Maybe it’s to pay down a high-interest debt. Perhaps it’s a down payment on a home. Or maybe splurge towards that tropical vacation.

How Holistic Financial Planning Keeps Your Raise Connected to Your Goals

A sizable raise touches more than just your investment account. It can affect taxes, insurance needs, estate planning decisions, charitable giving, and how much cash you keep on hand.

Black Diamond Advisory Partners’ Holistic Financial Planning brings those moving parts into a single, disciplined structure. As a result, income growth supports your long-term plan instead of creating new complexity.

It’s Time to Get Clear on How Your Impending Raise Can Raise Your Financial Future

If you want a plan that stays aligned through changing markets and changing goals, we can help. Explore the services below or reach out to start a conversation.

Disclosure: This material is for informational purposes only and is not individualized investment, tax, or legal advice. Investing involves risk, including possible loss of principal. 

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