I am 25 now (damn I feel old haha!) and I have gotten 2 promotions in my career so far. When I was younger I though that every promotion will be more spending money. Now that I have started living, every promotion just seems to fill expenses I didn't have before (most of them aren't even luxury expenses!)

My question is: How do I stop salary promotions from being filled up with new expenses?

Obviously getting a TV package, better internet deals and a more expensive car are very obvious reasons why the promotions feel like they are not doing anything. My real question is with things that are actually necessary like getting better medical aid, insurances, retirement plans.

So, any tips on living below your means? (NOT luxury wise, I am not someone who buys a sports car or better cellphone)

I recently got a promotion, and now my medical aid has gone up due to salary brackets. Everyone is advising me to get some type of retirement plan (South Africa) and I need to start putting money in an emergency savings. At the end of all of this I just feel like "what is the use of getting a promotion in the first place if I can't spend it on expenses I enjoy (traveling in my case)"

  • 1
    How much in percentage terms has your salary risen per year? Don’t forget to account for inflation - depending on the rate of inflation where you are, you might need 5% or more per year just to stand still in real terms.
    – Vicky
    Apr 9, 2019 at 7:53
  • 1
    I answered a similar open-ended question about budgeting when you are young, and learning to save, here: money.stackexchange.com/a/107548/81548
    – Rob
    Apr 9, 2019 at 8:02
  • @Vicky Thanks for this point, but yes, my increase was more than the inflation Apr 9, 2019 at 8:38
  • You can do what I did. When I had 2000 euros a month in my bank, I found I could save 1000 each month into a savings account. When I got a raise and was taking home 2200, I increased my savings to 1200 per month. And so on. I can live on 1000 euros, and get everything I need, so all above that goes to savings. I get a nice pleasant thrill to see the savings account statement each month, and it's a better thrill than tech toys which break or get boring, and unlike fancy meals or clubbing nights, it lasts. Apr 9, 2019 at 18:01
  • If you are 25 and haven't started paying into some kind of pension plan, start now. Make sure it comes out of your salary, before you have a chance to spend it.
    – Simon B
    Apr 10, 2019 at 22:15

6 Answers 6


How do I stop salary promotions from being filled up with new expenses?

You just do? There is nothing in the world that overrides your decisions, whether smart and stupid. So, if you geta promotion and thus more money - YOU are filling it with expenses.

  • Make a budget, you must visualize and materialize what you actually earn, be aware where you spend it and get to a willfull decision where you want to be and what you want to sav.
  • This includes putting up a budget for "funny money" etc.

Generally - move from "just spending" to careful planning. And own it. Because at the end it is not magic that new expenses happen. Make sure every espense that is not budgeted and recurring is actually thought out - stuff like "need to decide to take it 3 times with one week delay" gives you time to think about it. Obviously not relevant for "funny money" expenses or stuff budgeted in general or non recurring things. But maybe that new car is not such a good idea? ;) Because of monthly financing.

It really runs down to have a proper month by month budget and making decisions aware of the whole current situation. You signing contract does not magically happen.

I am not someone who buys a sports car

Start dreaming and aiming higher. There is nothing against that - some of them are ridiculously cheap. And then once you reach a certain point in your career and want one - why not ;)

  • Yes. You don't NEED TV packages or more expensive cars (and a better internet deal should cost less, no?) And while I am the kind of person who buys sports cars, I can get just as much fun out of a 15 year old Miata as a brand new Porsche. Lots of fun things can be quite inexpensive - so many that I don't really have time to do the expensive ones :-) (A visit to the Mr. Money Moustache site might be instructive...)
    – jamesqf
    Apr 11, 2019 at 17:49
  • They can, but this is a CHOICE someone does. And while you love your 15 year old Miata, I picked up an i8 yesterday. Choices. One makes them thinking about consequences (less money).
    – TomTom
    Apr 13, 2019 at 17:49
  • Sure, that's my point. The OP doesn't NEED the expensive things, but can choose to either spend pay increases on them, or keep spending low and have increased savings.
    – jamesqf
    Apr 14, 2019 at 18:25

One thing to bear in mind in your calculations is that the published inflation rate is an average of an average. The calculation of the headline figure covers the change in price of a basket of goods chosen to represent the goods that the statistical agency thinks the average person in the country consumes. If your consumption is concentrated away from this typical basket you can be subject to a much higher (or lower) than published inflation rate.

A good test is to look at how much your costs have actually changed over the period on a like-for-like basis. You may find that the published inflation rate under values the change in prices of online subscriptions or similar since the average citizen doesn't have a large number or wide range of these. To be of any real use you need to be careful that the prices that you use to calculate your personal inflation rate are as close each other over time as possible; don't compare a much better subscription now to your old one!

I assume that you have already thought of this but also be careful to compare costs to your post- rather than pre-tax income and, thanks to progressive taxation regimes, you cannot assume that an increase in your pre-tax salary will increase your post-tax salary by the same amount.

It is also a good idea to check that you are on the best tariffs for all of your services. In the UK it is common for utilities in particular to default you onto a more expensive tariff after the initial contract expires (although there are moves afoot to prevent this). You may be paying more for some services because a new customer deal has expired or because your contract has ended and you have moved onto an expensive rolling tariff. Checking every so often that you aren't getting a bad deal for being off contract is very important. You should do this for all contracts not just utilities; I chose them as an example of an exploitative practice in the UK that may or may not be relevant for ZA.

You also need to watch out for wasteful thinking - we are all susceptible to thinking that if we have plenty of money we can do more expensive things more often. I commonly dine out more if I think I have the money to afford it. Psychologically I'm doing the same things that I always have where as actually I'm increasing the frequency of expensive and more enjoyable habits and decreasing that of the cheaper ones. It all starts to add up.


Set a goal.

You are 25... Before you know it.. you will be 30...

If you are renting, the first thing you should do is to save for a place. Buy in a decent location, up and coming areas are fine.

If you have a goal to by a place, you will need to save up for a down payment.

That will likely take care of your urge to spend on the silly stuff.

Or, if you want to save for grad school, that's fine too...

Just need a goal.


There are things you can't do anything about, like taxes going up or your employer's contribution to medical insurance going down. The rest is up to you.

Keep in mind that some of the things you mentioned, like a better medical plan or insurance or saving for emergencies are things that you'll enjoy having (if you ever need to use them). Spending wisely in them is a good choice, and part of being an adult.

That being said, make sure you do save some of your new income for "fun money". Half of your after-tax raise would probably be good, depending on your situation. It will keep you motivated and let you enjoy the fruits of your hard work.


There is a financial planner named Pete the Planner, he discusses the power percentage. this kinda Solves your issue. His basic principles is try not to spend more than 60% of your income and use the rest to get rid of debt or build wealth. This also is a decent plan so if you ever get demoted or lose your job, you won't have to change your lifestyle much. So congrats on the new promotion, but start putting money away. I'm a big fan of apps like stash, acorns, robinhood, M1. Make sure your maxing out your Roth IRA. Money that's out of sight and looks like it's increasing in value, is a great way to stop you from buying crap with that money.


Partly, you cannot avoid that. I don't know about things in South Africa, but in Germany, if you get an increase in the gross earnings, the net earnings rise by a much smaller amount. That's because all deductions (?) which are taken out from your salary depend on that salary, amount-wise.

So if a gross increase of $100/100 €/100 R, you maybe get a net increase of only 50. Or 60, or 40. Depends.

This money, however, is free to your disposal. If you keep living as you used before, you immediately can put it to your savings.

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