Doubling my salary
July 31, 2021 7:22 AM
I’m going from making $42k a year to $85k. Other than the smart financially responsible things I will do, I’m curious what changes others made if they’ve been through the same thing?
I’m also back to having benefits so the $1300 I spent monthly on an ACA plan for myself and my husband is also extra money in the bank.
I’ve never made this much in my life so I really don’t know what this is like!
I’m also back to having benefits so the $1300 I spent monthly on an ACA plan for myself and my husband is also extra money in the bank.
I’ve never made this much in my life so I really don’t know what this is like!
Besides throwing money in savings whenever I think about it, the nicest thing about making more money than I ever imagined I would is just letting go of some of the anxiety that used to accompany every single purchase. Just. Setting down the money worries.
I also use the shampoo I like best even though it is unreasonably expensive. Buy books when I want to read them.
I figure it won’t last forever, but it’s very restful to be able to afford my life. I wish this expansive feeling was the norm for everyone, money worries are a form of torture.
posted by Lawn Beaver at 7:38 AM on July 31, 2021
I also use the shampoo I like best even though it is unreasonably expensive. Buy books when I want to read them.
I figure it won’t last forever, but it’s very restful to be able to afford my life. I wish this expansive feeling was the norm for everyone, money worries are a form of torture.
posted by Lawn Beaver at 7:38 AM on July 31, 2021
Keep an eye on your taxes. Underpayment of withholding can take a big bite.
Don't run out and buy a lot of stuff. "You know what's more expensive than an albino tiger? The upkeep on an albino tiger."
If you have outstanding debt, use this opportunity to pay it down. This will free up your money later for investment opportunities.
For investments, I recommend starting with indexed mutual funds before trying anything fancy.
Do not buy cryptocurrency.
posted by SPrintF at 7:39 AM on July 31, 2021
Don't run out and buy a lot of stuff. "You know what's more expensive than an albino tiger? The upkeep on an albino tiger."
If you have outstanding debt, use this opportunity to pay it down. This will free up your money later for investment opportunities.
For investments, I recommend starting with indexed mutual funds before trying anything fancy.
Do not buy cryptocurrency.
posted by SPrintF at 7:39 AM on July 31, 2021
Are you ok with your life now? Are your basic needs met? Are your family's basic needs met? If so, the advice I was given might be applicable to you: avoid lifestyle escalation and save most of the money. I'd suggest adding about 10-20% of the raise to your monthly budget, earmarking another few percent for donations to a cause that's important to you, and socking the rest away in debt repayment/savings/retirement funds. When I did this, I auto-debited the repayment/savings/retirement money out of my checking account so that I basically never even saw it.
Adding 10-20% of the raise to your monthly budget gives you enough to make some thoughtful choices about what will really make a difference to your quality of life. For me, for instance -- buying a good quality tent so I can go camping? Yes, that makes me happier. Frittering away a lot of cash on ordering out food? Doesn't actually make me any happier. I find that budgeting some of the increase for donations helps make me happier as well. As for the debt repayment/savings/retirement fund -- being able to reduce debt and sock something away really, really helps me sleep better at night. It might do the same for you.
The most important thing is to avoid having money just sloshing around with no particular plan -- it will fly out of your bank account and into a whole lot of pointless expenses that won't actually make you happier. If you're not already familiar with the concept of the hedonic treadmill, now would be a good time to learn. "The hedonic treadmill, also known as hedonic adaptation, is the observed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes. According to this theory, as a person makes more money, expectations and desires rise in tandem, which results in no permanent gain in happiness...The hedonic treadmill viewpoint suggests that wealth does not increase the level of happiness." Think hard about what you need vs. what you want, and what you think will genuinely make you happier in the long term.
posted by ourobouros at 7:47 AM on July 31, 2021
Adding 10-20% of the raise to your monthly budget gives you enough to make some thoughtful choices about what will really make a difference to your quality of life. For me, for instance -- buying a good quality tent so I can go camping? Yes, that makes me happier. Frittering away a lot of cash on ordering out food? Doesn't actually make me any happier. I find that budgeting some of the increase for donations helps make me happier as well. As for the debt repayment/savings/retirement fund -- being able to reduce debt and sock something away really, really helps me sleep better at night. It might do the same for you.
The most important thing is to avoid having money just sloshing around with no particular plan -- it will fly out of your bank account and into a whole lot of pointless expenses that won't actually make you happier. If you're not already familiar with the concept of the hedonic treadmill, now would be a good time to learn. "The hedonic treadmill, also known as hedonic adaptation, is the observed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes. According to this theory, as a person makes more money, expectations and desires rise in tandem, which results in no permanent gain in happiness...The hedonic treadmill viewpoint suggests that wealth does not increase the level of happiness." Think hard about what you need vs. what you want, and what you think will genuinely make you happier in the long term.
posted by ourobouros at 7:47 AM on July 31, 2021
Budgeting is more important, not less. It’s way easier to lose track of where discretionary funds go when you have more of it.
Immediately put as much of your “raise” into savings as you can; keep as much of your monthly expenditures the same as is reasonable.
posted by supercres at 7:52 AM on July 31, 2021
Immediately put as much of your “raise” into savings as you can; keep as much of your monthly expenditures the same as is reasonable.
posted by supercres at 7:52 AM on July 31, 2021
In the early 2010s, I went from less than $20k as a grad student to more than $80k as a software developer. At the same time, I moved to a city with about double the cost of living ($650 apartment to $1500 apartment, etc), so the change in effective buying power was similar. Here's my experience:
Biggest positive change: Fully-fund retirement (limit is $19,500 for a 401k in the US this year, I think). In some ways it stinks to see less money coming into checking/savings, but over time, consistent contributions plus compounding interest does add up. I have severe anxiety about how/if retirement will work for my generation, but I am still saving as much as I can because I'd rather be prepared if I do make it to 70 and the world hasn't entirely fallen down around my ears.
Biggest mistake: I ordered food. A lot. Like, a lot, a lot. Some of that was a reaction to "omg I've been making ramen and pasta and rice and beans for so many years, let's get Starbucks on the way to work!" Starbucks isn't even really good coffee.
Also, as ourobouros writes: liquid emergency fund! (what happens if I have a major medical bill?!) I think I probably took the e-fund too far, since I now have lots of cash in savings and missed out on a bunch of stock market growth, but then again, I could've bought the 2020 dip and didn't, so no sense worrying too much about that. At the same time, the market could've tanked, so, I don't have too many regrets.
Agree re: hedonic treadmill. We're doing quite well now so my wife and I are willing to YOLO reasonable expenses that we feel improve our lives (ie: we just bought a couch and a TV this month, after neither of us owning either, mainly so we had a place to hang out together that wasn't "sitting in bed"), but also that's our first major expense after saving hard during the first round of the pandemic, when we weren't sure how her job situation was going to shake out.
posted by Alterscape at 7:57 AM on July 31, 2021
Biggest positive change: Fully-fund retirement (limit is $19,500 for a 401k in the US this year, I think). In some ways it stinks to see less money coming into checking/savings, but over time, consistent contributions plus compounding interest does add up. I have severe anxiety about how/if retirement will work for my generation, but I am still saving as much as I can because I'd rather be prepared if I do make it to 70 and the world hasn't entirely fallen down around my ears.
Biggest mistake: I ordered food. A lot. Like, a lot, a lot. Some of that was a reaction to "omg I've been making ramen and pasta and rice and beans for so many years, let's get Starbucks on the way to work!" Starbucks isn't even really good coffee.
Also, as ourobouros writes: liquid emergency fund! (what happens if I have a major medical bill?!) I think I probably took the e-fund too far, since I now have lots of cash in savings and missed out on a bunch of stock market growth, but then again, I could've bought the 2020 dip and didn't, so no sense worrying too much about that. At the same time, the market could've tanked, so, I don't have too many regrets.
Agree re: hedonic treadmill. We're doing quite well now so my wife and I are willing to YOLO reasonable expenses that we feel improve our lives (ie: we just bought a couch and a TV this month, after neither of us owning either, mainly so we had a place to hang out together that wasn't "sitting in bed"), but also that's our first major expense after saving hard during the first round of the pandemic, when we weren't sure how her job situation was going to shake out.
posted by Alterscape at 7:57 AM on July 31, 2021
Here is what I have done:
1. take a chunk (I usually define as first paycheck or half of a bonus/windfall) and that becomes free money. You've earned it! Enjoy! Use this to buy yourself whatever nice thing you want.
2. Create a revised healthy budget prioritizing your priorities. I like to take the entire difference between my new budget and my new income and save towards paying things off - the car, the loan, etc.
3. Avoid acquiring new ongoing expenses. For example, I bought myself a second bird feeder, and now I need to buy 2x as much bird seed, which is an ongoing expense I don't enjoy paying for.
posted by rebent at 8:00 AM on July 31, 2021
1. take a chunk (I usually define as first paycheck or half of a bonus/windfall) and that becomes free money. You've earned it! Enjoy! Use this to buy yourself whatever nice thing you want.
2. Create a revised healthy budget prioritizing your priorities. I like to take the entire difference between my new budget and my new income and save towards paying things off - the car, the loan, etc.
3. Avoid acquiring new ongoing expenses. For example, I bought myself a second bird feeder, and now I need to buy 2x as much bird seed, which is an ongoing expense I don't enjoy paying for.
posted by rebent at 8:00 AM on July 31, 2021
The only magic in investing is compound interest. Taking advantage of a 401K plan or IRA or whatever pays off big time in the long run.
OTOH, Congratulations. I would identify the biggest irritation in your life, or maybe a couple small ones, and reward yourself by dealing with them if you can.
posted by SemiSalt at 8:06 AM on July 31, 2021
OTOH, Congratulations. I would identify the biggest irritation in your life, or maybe a couple small ones, and reward yourself by dealing with them if you can.
posted by SemiSalt at 8:06 AM on July 31, 2021
Think about catching up on deferred maintenance.
Take stock of anything around you that's a bit broken or needs regular repair or is simply near the point where it's likely to crap out on you at short notice: something that incurs recurring costs because of its age or condition. It could be something like an old, inefficient appliance that silently adds a chunk to your electricity bill (fridges are a top example) or a rickety HVAC system or a car that always has something else need fixing when it's in the shop. It could be intangible things, too.
(This is Vimes's Boot Theory.)
If you have a mortgage there's also the option to pay down a mortgage a little more quickly by making an additional payment against principal every year or just adding a certain amount to the monthly payment to go against the principal. That may or may not work for you depending on your financial situation. You can afford to pay someone to work out whether it works for you.
Consider the value of your time, especially for things you don't do often but need to do and hate to do, or things that are easier for professionals to do because they have the tools and equipment and experience. Gutter cleaning? Taking on the brush in your garden? Maybe a deep clean of the house?
All of these approaches are ways to use your extra money well, but not have it sitting around staring at you.
[On preview] I pretty much agree with ourobouros. But also: have a very strict budget for random nice things. Perhaps even create a standalone Nice Things bank account that you fund with a monthly transfer.
posted by holgate at 8:09 AM on July 31, 2021
Take stock of anything around you that's a bit broken or needs regular repair or is simply near the point where it's likely to crap out on you at short notice: something that incurs recurring costs because of its age or condition. It could be something like an old, inefficient appliance that silently adds a chunk to your electricity bill (fridges are a top example) or a rickety HVAC system or a car that always has something else need fixing when it's in the shop. It could be intangible things, too.
(This is Vimes's Boot Theory.)
If you have a mortgage there's also the option to pay down a mortgage a little more quickly by making an additional payment against principal every year or just adding a certain amount to the monthly payment to go against the principal. That may or may not work for you depending on your financial situation. You can afford to pay someone to work out whether it works for you.
Consider the value of your time, especially for things you don't do often but need to do and hate to do, or things that are easier for professionals to do because they have the tools and equipment and experience. Gutter cleaning? Taking on the brush in your garden? Maybe a deep clean of the house?
All of these approaches are ways to use your extra money well, but not have it sitting around staring at you.
[On preview] I pretty much agree with ourobouros. But also: have a very strict budget for random nice things. Perhaps even create a standalone Nice Things bank account that you fund with a monthly transfer.
posted by holgate at 8:09 AM on July 31, 2021
Congratulations! This is a huge jump and I hope it feels very positive. I won't really touch on retirement savings, paying down debt, etc. and focus on some more abstract/psychological aspects of this.
First: definitely celebrate this. Responsibly! But not so responsibly that you deny yourself any pleasure today because you're thinking only of the future. If you're already a pretty frugal person, this point is especially important. My suggestion would be: the first paycheck, take some percentage of your increased income (20%? 50%? you decide) and splurge on something that you wouldn't normally get. Some ideas at different scales of spending: really nice stationery or a fountain pen; a charcuterie platter of really nice cheeses, fruits, and so on; new shoes or a nice coat; a dinner out with your husband, maybe with champagne and several apps and a dessert, if you rarely order those things; a weekend trip; a ceramics or other crafting/hobby/activity class…
Then: try to keep your budget as it is for a few months, diverting most of the extra money to classically responsible purposes, like debt or retirement savings or so on. I'd definitely recommend making some of those diversions permanent, e.g. permanently putting an extra x% more into your 401(k) than you were able to do before. You can google around for some calculators showing how much your retirement contributions will be worth, after compounding and market growth, when you are in your 50s, 60s, and above. It's very encouraging to see the charts, in my experience.
I suggest a few months of keeping your current budget because you'll have some time to think through how the money can be most useful—where spending money in your present life (not just for your future life) will make a significant difference, whether emotional or functional.
I personally picked some categories that I wanted to be a little less frugal in. Would it feel amazing and luxurious and enjoyable to go to concerts more often? To buy nicer makeup, clothes? To eat out more? To hire a house cleaner for occasional dusting you really don't want to do? Obviously, this only works if you pick a few categories that matter, not all of them.
You can also think about larger expenses that will stretch out over a few months/years, and save intentionally for those. Do you want to put a bit of money every week into a savings account earmarked for an extra nice vacation? To set up a modest home gym?
The goal for me was always to keep my expenses below my income and not inflate my lifestyle to match my new means. But definitely inflate a little bit, in the right places.
One last specific suggestion. If there are any medical or health-related expenses you've been deferring (dental work, a few sessions with a physiotherapist or personal trainer, mental health therapy or counseling), do that. If you are cavity prone, I apologize if this sounds like an ad…but I haven't gotten any cavities since I switched to an electric toothbrush and committed to regular flossing. My dentist hates Quip and Sonicare but recommends Oral-B. I would think about whether there are any other expenses that will secure your long-term health and well-being (and might even cut down on future medical costs).
posted by w-w-w at 8:15 AM on July 31, 2021
First: definitely celebrate this. Responsibly! But not so responsibly that you deny yourself any pleasure today because you're thinking only of the future. If you're already a pretty frugal person, this point is especially important. My suggestion would be: the first paycheck, take some percentage of your increased income (20%? 50%? you decide) and splurge on something that you wouldn't normally get. Some ideas at different scales of spending: really nice stationery or a fountain pen; a charcuterie platter of really nice cheeses, fruits, and so on; new shoes or a nice coat; a dinner out with your husband, maybe with champagne and several apps and a dessert, if you rarely order those things; a weekend trip; a ceramics or other crafting/hobby/activity class…
Then: try to keep your budget as it is for a few months, diverting most of the extra money to classically responsible purposes, like debt or retirement savings or so on. I'd definitely recommend making some of those diversions permanent, e.g. permanently putting an extra x% more into your 401(k) than you were able to do before. You can google around for some calculators showing how much your retirement contributions will be worth, after compounding and market growth, when you are in your 50s, 60s, and above. It's very encouraging to see the charts, in my experience.
I suggest a few months of keeping your current budget because you'll have some time to think through how the money can be most useful—where spending money in your present life (not just for your future life) will make a significant difference, whether emotional or functional.
I personally picked some categories that I wanted to be a little less frugal in. Would it feel amazing and luxurious and enjoyable to go to concerts more often? To buy nicer makeup, clothes? To eat out more? To hire a house cleaner for occasional dusting you really don't want to do? Obviously, this only works if you pick a few categories that matter, not all of them.
You can also think about larger expenses that will stretch out over a few months/years, and save intentionally for those. Do you want to put a bit of money every week into a savings account earmarked for an extra nice vacation? To set up a modest home gym?
The goal for me was always to keep my expenses below my income and not inflate my lifestyle to match my new means. But definitely inflate a little bit, in the right places.
One last specific suggestion. If there are any medical or health-related expenses you've been deferring (dental work, a few sessions with a physiotherapist or personal trainer, mental health therapy or counseling), do that. If you are cavity prone, I apologize if this sounds like an ad…but I haven't gotten any cavities since I switched to an electric toothbrush and committed to regular flossing. My dentist hates Quip and Sonicare but recommends Oral-B. I would think about whether there are any other expenses that will secure your long-term health and well-being (and might even cut down on future medical costs).
posted by w-w-w at 8:15 AM on July 31, 2021
I bought a new computer when mine started to do a weird noise, instead of waiting until it completely died. Bought a new phone when I dropped the old one and fractured the camera glass. Stopped for takeout when I was tired instead of coming home and having to think how to feed myself. Paid $30 at the opthalmologist to use the fancy retina camera instead of getting the pupil dilation drops. Etc.
Being able to purchase convenience for my future self is, for me, the biggest treat of having disposable income.
posted by phunniemee at 8:29 AM on July 31, 2021
Being able to purchase convenience for my future self is, for me, the biggest treat of having disposable income.
posted by phunniemee at 8:29 AM on July 31, 2021
Not having to hunt down the cheapest ‘everything’ has probably just become much more viable. What I mean by that is that I used to have to book the cheapest flights. Generally speaking this entailed inconvenient airports/travel at times if day that resulted in all kinds of inconvenience and sleep deprivation, long layovers in places I did not want to be and budget airlines that may ir may not have awful customer service etc. Well, now I can afford to value my time and convenience when I pick a flight, hotel or rental car.
Or things like buying a new hair dryer. If I spend 5 hrs searching the internet for the best deal on my first or second choice model I may safe 5% by traipsing across town to buy it because the offer runs out tonight. Or I could just go to my local store or preferred online retailer and buy the thing and use the 5 hrs to work on my craft project. Clearly, the more expensive the purchase the less this applies but for a minor appliance.
posted by koahiatamadl at 8:33 AM on July 31, 2021
Or things like buying a new hair dryer. If I spend 5 hrs searching the internet for the best deal on my first or second choice model I may safe 5% by traipsing across town to buy it because the offer runs out tonight. Or I could just go to my local store or preferred online retailer and buy the thing and use the 5 hrs to work on my craft project. Clearly, the more expensive the purchase the less this applies but for a minor appliance.
posted by koahiatamadl at 8:33 AM on July 31, 2021
Congratulations!
Get quality shoes; your feet will thank you. And dental work if you've been putting it off. If there are household chores / maintenance you dislike, throw money at the problem. For me, that's mowing the lawn. I now pay 35/mow and get a boatload of time back in my life.
Fully fund your retirement accounts (19500 into 401k, plus 6000 Roth IRA), and emergency fund, and a *separate* fuck-you fund for when your employer tells you to do something contrary to your values.
posted by basalganglia at 9:00 AM on July 31, 2021
Get quality shoes; your feet will thank you. And dental work if you've been putting it off. If there are household chores / maintenance you dislike, throw money at the problem. For me, that's mowing the lawn. I now pay 35/mow and get a boatload of time back in my life.
Fully fund your retirement accounts (19500 into 401k, plus 6000 Roth IRA), and emergency fund, and a *separate* fuck-you fund for when your employer tells you to do something contrary to your values.
posted by basalganglia at 9:00 AM on July 31, 2021
Pay down your debt as fast as possible. I cannot stress this enough. Almost nothing else will give you a better ROI than getting out from under compound interest. The only thing I'd start spending more on is higher quality groceries (fresh veggies and good quality meats, stocking up on dry good staples,etc) if you've been getting cheap unhealthy stuff for budget reasons or only buying tiny amounts that cost tons more than bulk purchases.
Continue living on your previous budget until you're debt free. Depending on the amount, student loans could be an exception, but even then, I'd start allocating a large monthly chunk over the minimum payment. Once the debt is gone, start saving 6-12 months of living expenses.
After you've saved that up, start replacing the oldest things that will give you the most improvements to your quality of life. Whether that's new socks, a car that doesn't constantly break down (buy a decent used car, dont go buck wild here), or a new mattress so you dont wake up in pain every day.
I paid down over $40k of credit card debt within a year using this method. The other trick was to find new cards with 0 interest for the first year with free balance transfers, as long as I could pay that amount down within that year (as those cards often have a super high rate once the forst year is done).
It wasn't as hard as I thought to keep the previous budget discipline. And it was certainly better on my mental state to finally be out of debt and had some savings, so that when I started making purchases I didnt feel guilty.
Congratulations. Enjoy this opportunity to really change the direction of your financial future.
posted by ananci at 9:02 AM on July 31, 2021
Continue living on your previous budget until you're debt free. Depending on the amount, student loans could be an exception, but even then, I'd start allocating a large monthly chunk over the minimum payment. Once the debt is gone, start saving 6-12 months of living expenses.
After you've saved that up, start replacing the oldest things that will give you the most improvements to your quality of life. Whether that's new socks, a car that doesn't constantly break down (buy a decent used car, dont go buck wild here), or a new mattress so you dont wake up in pain every day.
I paid down over $40k of credit card debt within a year using this method. The other trick was to find new cards with 0 interest for the first year with free balance transfers, as long as I could pay that amount down within that year (as those cards often have a super high rate once the forst year is done).
It wasn't as hard as I thought to keep the previous budget discipline. And it was certainly better on my mental state to finally be out of debt and had some savings, so that when I started making purchases I didnt feel guilty.
Congratulations. Enjoy this opportunity to really change the direction of your financial future.
posted by ananci at 9:02 AM on July 31, 2021
I am single and experienced the same income growth you did over a slightly longer period of time (a few years). I live in a relatively high COL area but not the fanciest possible neighborhood. I own a condo now and one of the main things the extra cash allowed me to do was even consider getting out of the trap of 5-10% annual rent increases in my area. I was putting away >30% of my salary even with somewhat high rent because I tried to stick to a loose budget and just didn't have any really expensive vices or health crises or debt and drove a modest car. I continued to do the math on the rent vs buy calculation in my area (https://www.nerdwallet.com/mortgages/rent-vs-buy-calculator) and finally hit the tipping point before the pandemic where it was cheaper to buy and had enough cash left over for cosmetic renovations. I would never have been able to do this even on a salary that let me afford the mortgage on paper - I needed the cash and I didn't want to dip into retirement for it. This may or may not be the case that owning a home will be cheaper for you depending on where you live but you should start doing the math if you're a renter. You may make a different decision that also makes sense for you; maybe you continue to rent but move to a neighborhood you like more that saves you from a commute if you have one, and that gives you hours of your life back. The overall point is that you probably have more options about where to live now and you should weigh them carefully since housing is probably your biggest expense. But you will probably be comfortable enough now that things other than money can enter the calculation. Think long term and remember that housing is a highly leveraged high risk bet as an "investment" if you do buy. Buy a place to have somewhere nicer than a rental to live if that math works out for you compared to renting, not because its an "investment"
posted by slow graffiti at 9:09 AM on July 31, 2021
posted by slow graffiti at 9:09 AM on July 31, 2021
I went through a similar salary bump once. And my new job was also dramatically more demanding than my previous one. Since I was spending more hours and mental energy at work, the exhaustion crept in a bit faster. I chose to increase my budget for takeout and to hire a house cleaner, and then socked the rest of the extra funds away in savings. It took a couple of my least favorite chores off my plate and it was nice to come home from a long week at the office to a clean house and easy food.
posted by JannaK at 9:19 AM on July 31, 2021
posted by JannaK at 9:19 AM on July 31, 2021
One non-financial piece that you might consider is how your relationships may change. Newly able to shower generosity on loved ones, you may go overboard. Worst case, they may see you differently, or you them.
Another is a (very your-miles-may-vary!) psychological one: anxiety about tight budgets can eventually evolve into anxiety about optimizing the utility of the new money. The ability to do more kinda invites one to care harder about doing it right. And there’s no shortage of people giving advice, including some that is good intentioned, so wading through wheat and chaff can be consuming.
posted by mahorn at 9:50 AM on July 31, 2021
Another is a (very your-miles-may-vary!) psychological one: anxiety about tight budgets can eventually evolve into anxiety about optimizing the utility of the new money. The ability to do more kinda invites one to care harder about doing it right. And there’s no shortage of people giving advice, including some that is good intentioned, so wading through wheat and chaff can be consuming.
posted by mahorn at 9:50 AM on July 31, 2021
If you have debt, then I agree that paying it down is the first priority.
Set up your bank account to sweep money out automatically so you aren't tempted to spend it. I have money automatically transferred to my Roth IRA, to my personal savings, to a special account my wife and I have set up to make a downpayment on our next car (when it's eventually time to buy), etc. My wife and I have a joint account that we use for regular household expenses, and money gets swept into that. I usually have some money left in my personal checking account after all this, which I do spend on personal stuff. Obviously you'll need to have a rough budget so that you can fix the amounts for these sweeps, and you will occasionally need to make one-time adjustments.
posted by adamrice at 9:52 AM on July 31, 2021
Set up your bank account to sweep money out automatically so you aren't tempted to spend it. I have money automatically transferred to my Roth IRA, to my personal savings, to a special account my wife and I have set up to make a downpayment on our next car (when it's eventually time to buy), etc. My wife and I have a joint account that we use for regular household expenses, and money gets swept into that. I usually have some money left in my personal checking account after all this, which I do spend on personal stuff. Obviously you'll need to have a rough budget so that you can fix the amounts for these sweeps, and you will occasionally need to make one-time adjustments.
posted by adamrice at 9:52 AM on July 31, 2021
I bought a condo a couple years ago and am now on my condo board. We’re required to consult with a relevant professional every five years and have a plan for major capital expenses (the relevant professional is able to tell us both what will need to be repaired or replaced when, and also about how much we should budget for it). The condo corporation had fallen a little behind on this previously, so the difference that having such a multi-year financial plan makes has been particularly obvious. I keep telling myself that I should also do this for my personal expenses. I haven’t done it yet, because I got a little bit out of the habit of budgeting quite so closely once I started making enough money to easily cover all of my regular expenses. But, as others have said above, those regular expenses have a tendency to creep up over time if one isn’t paying attention; and it’s a lot easier to get in that multi-year budgeting habit when you’ve already been keeping a close budget out of necessity, than when you’ve gotten a bit more lax on keeping track of money as I currently have.
Coming from a working class background, my corresponding jump in pay was also a slightly challenging adjustment emotionally. If that’s also you, I found bell hooks’ writing on her similar experiences helpful and supportive. I’m sure there are other accounts of such a transition of bell hooks is not your cup of tea, as well.
posted by eviemath at 9:59 AM on July 31, 2021
Coming from a working class background, my corresponding jump in pay was also a slightly challenging adjustment emotionally. If that’s also you, I found bell hooks’ writing on her similar experiences helpful and supportive. I’m sure there are other accounts of such a transition of bell hooks is not your cup of tea, as well.
posted by eviemath at 9:59 AM on July 31, 2021
Tip ridiculously well on small purchases, make someone's day. It feels amazing and honestly doesn't cost you that much, relatively.
posted by dinty_moore at 10:00 AM on July 31, 2021
posted by dinty_moore at 10:00 AM on July 31, 2021
Significantly upped donations (especially to local orgs).
Dined out a lot more, with little regard for price (this may not be responsible but I’m fine with it - my husband is in the culinary industry and it’s important to us to support local restaurants, and it brings us a ton of joy).
Major upgrades to our small house (in the $40k range over a few years) but did NOT move to a bigger or fancier house. Would rather eat out more. :)
Stopped caring that much about how much we spend on the dogs.
You generally covered responsible financial stuff, but I also max out my 401k yearly.
posted by obfuscation at 10:01 AM on July 31, 2021
Dined out a lot more, with little regard for price (this may not be responsible but I’m fine with it - my husband is in the culinary industry and it’s important to us to support local restaurants, and it brings us a ton of joy).
Major upgrades to our small house (in the $40k range over a few years) but did NOT move to a bigger or fancier house. Would rather eat out more. :)
Stopped caring that much about how much we spend on the dogs.
You generally covered responsible financial stuff, but I also max out my 401k yearly.
posted by obfuscation at 10:01 AM on July 31, 2021
Just thought I'd weigh in with some details because people have given more specific help than I expected.
- I grew up working class. I've always had insecurity about money and about not making an amount that felt 'successful' to me. I'm 36 so it's been a long journey to get here. It's just my husband and I, no children or plans for them. Due to living in a VHCOL city for a long time and then scrambling money together for a house, we have no retirement savings. All that is going to change now. I feel like the windfall I'm getting and the actual possibility of retiring means I should get a financial planner because I have no clue how to be responsible about big chunks of cash being in the most profitable place. I'm also inheriting probably $130k in the next few months so this really is a whole lot happening at once.
- We live in a rural area well within our means. I'm definitely more of a spender than my husband though. We rarely go out to eat, we're very lazy about getting in the car and going places. Nowhere around us delivers food. I'd say the largest line of our budget now is food. I love cooking. We very very rarely travel. We have three dogs and one is a bit of a handful. We have limited dog sitting availability where we live.
- We own a house. I plan on adding at least an additional $800 a month to paying off the principle. Calculators say I can shave off 18 years on the mortgage. We are extremely lucky in that we got a house Oct 2019 before the market here in Vermont exploded. We'd be 100% shit out of luck now.
- I usually keep $3k in our checking and funnel anything else to the HYSA. I look at our accounts daily so I do transfers myself rather than as an auto thing. I know now I should start investing not just putting things in a savings account.
- My husband is an independent contractor so his income is 'unpredictable' but he usually makes at least $60k a year. I'm figuring we live off my income and his is saved/invested whenever his income comes in.
- I plan on contributing to my 401k right away. Company will start matching after a year and I'll take advantage of whatever the max is then.
- We save for taxes in a HYSA and pay at the end of the year. When I'm a W2 employee I never claim any allowances and have the max taken out each paycheck for taxes so I've only ever gotten refunds.
- The only debt we have is $9k left to pay on a car. We actually plan on trading it in to get a more practical vehicle. Whatever is left to pay we'll just pay off once we have the money.
- We do have two big ticket plans but they're something we've wanted a long time. A geodome greenhouse for me and a small outdoor sauna for him. As homebodies, and as an avid gardener in zone 5, these are investments to us.
- We have plans to continue to renovate our house. Those things we're planning on doing ourselves almost entirely, except for some help with a bathroom renovation. It's our forever house.
- I donate to many charities each month and I didn't even think of upping the donations! Great idea.
- Already a huge tipper, I've worked in the service industry and I tip even more since COVID.
- We have about $20k in a HYSA right now so I plan on topping that up to 6 months expenses once the inheritance arrives.
I really really appreciate all the insight!
posted by emotionalmotionsickness at 10:22 AM on July 31, 2021
- I grew up working class. I've always had insecurity about money and about not making an amount that felt 'successful' to me. I'm 36 so it's been a long journey to get here. It's just my husband and I, no children or plans for them. Due to living in a VHCOL city for a long time and then scrambling money together for a house, we have no retirement savings. All that is going to change now. I feel like the windfall I'm getting and the actual possibility of retiring means I should get a financial planner because I have no clue how to be responsible about big chunks of cash being in the most profitable place. I'm also inheriting probably $130k in the next few months so this really is a whole lot happening at once.
- We live in a rural area well within our means. I'm definitely more of a spender than my husband though. We rarely go out to eat, we're very lazy about getting in the car and going places. Nowhere around us delivers food. I'd say the largest line of our budget now is food. I love cooking. We very very rarely travel. We have three dogs and one is a bit of a handful. We have limited dog sitting availability where we live.
- We own a house. I plan on adding at least an additional $800 a month to paying off the principle. Calculators say I can shave off 18 years on the mortgage. We are extremely lucky in that we got a house Oct 2019 before the market here in Vermont exploded. We'd be 100% shit out of luck now.
- I usually keep $3k in our checking and funnel anything else to the HYSA. I look at our accounts daily so I do transfers myself rather than as an auto thing. I know now I should start investing not just putting things in a savings account.
- My husband is an independent contractor so his income is 'unpredictable' but he usually makes at least $60k a year. I'm figuring we live off my income and his is saved/invested whenever his income comes in.
- I plan on contributing to my 401k right away. Company will start matching after a year and I'll take advantage of whatever the max is then.
- We save for taxes in a HYSA and pay at the end of the year. When I'm a W2 employee I never claim any allowances and have the max taken out each paycheck for taxes so I've only ever gotten refunds.
- The only debt we have is $9k left to pay on a car. We actually plan on trading it in to get a more practical vehicle. Whatever is left to pay we'll just pay off once we have the money.
- We do have two big ticket plans but they're something we've wanted a long time. A geodome greenhouse for me and a small outdoor sauna for him. As homebodies, and as an avid gardener in zone 5, these are investments to us.
- We have plans to continue to renovate our house. Those things we're planning on doing ourselves almost entirely, except for some help with a bathroom renovation. It's our forever house.
- I donate to many charities each month and I didn't even think of upping the donations! Great idea.
- Already a huge tipper, I've worked in the service industry and I tip even more since COVID.
- We have about $20k in a HYSA right now so I plan on topping that up to 6 months expenses once the inheritance arrives.
I really really appreciate all the insight!
posted by emotionalmotionsickness at 10:22 AM on July 31, 2021
I should qualify that "debt" comment: if you have debt at an interest rate above inflation, paying it down is your first priority. If you have very low-interest debt (like a lot of car loans), you're effectively being paid to borrow money, so there's no incentive to pay it off early other than the psychological reward of not having it hanging over your head.
posted by adamrice at 10:38 AM on July 31, 2021
posted by adamrice at 10:38 AM on July 31, 2021
Coming from a similar background, but lower starting and ending numbers, similar jump: We lived the same way until we had paid off our debt, then lived the same way (except for buying good-quality long-lasting items instead of their cheaper counterparts, a long-term savings) until we had a good down payment on a house, then lived the same way but put extra money into mortgage/retirement and donate more. It sounds like you’re happy with your life, so just pretend that money doesn’t exist and put it in a retirement account so you can live that happy life when you’re done working.
posted by tchemgrrl at 10:40 AM on July 31, 2021
posted by tchemgrrl at 10:40 AM on July 31, 2021
I found YNAB super helpful when my income jumped by a factor of like 4 overnight post-PhD (from ~$20k to ~80k). While I wasn't in debt (well, then I suddenly was because I had to immediately buy a car), there were a lot of financial boxes I hadn't ticked, like a couple months worth of savings in event of losing my job, never mind things like retirement savings.
The idea that I had money that I could spend on just, like, random shit I wanted was (and still is, to be honest) dizzying and having a budget gave me a structure for giving myself permission to buy myself a book I wanted or whatever without feeling anxious and guilty about it. Of course, the "OMG I have money now" feelings of panic started all over again when I had caught up on ticking boxes of financial stability and I still haven't totally figured it out seven years later. (And writing this comment has made me realise I defended exactly seven years ago today.)
posted by hoyland at 11:09 AM on July 31, 2021
The idea that I had money that I could spend on just, like, random shit I wanted was (and still is, to be honest) dizzying and having a budget gave me a structure for giving myself permission to buy myself a book I wanted or whatever without feeling anxious and guilty about it. Of course, the "OMG I have money now" feelings of panic started all over again when I had caught up on ticking boxes of financial stability and I still haven't totally figured it out seven years later. (And writing this comment has made me realise I defended exactly seven years ago today.)
posted by hoyland at 11:09 AM on July 31, 2021
I’m not a financial planning expert, but just following on your update: it is pretty common advice that investing extra money is more financially sound than aggressively paying down a mortgage. Ideally you’re making at least, say, 7% annually from the stock market, so that earns you more than not paying a 3-4% mortgage. If you really want to shave time off your mortgage, it’s worth running the numbers on a refi to a 15 year. The rates are usually lower than 30 years (in my limited understanding!). When my husband and I refi-ed our house, between the interest rate dropping several percentage points (possibly less dramatic for you given the timeline) and being able to ditch PMI (again possibly irrelevant for you), the increase in monthly payment was pretty trivial. Again - this is not fully formed financial advice, just something to think about.
posted by obfuscation at 11:17 AM on July 31, 2021
posted by obfuscation at 11:17 AM on July 31, 2021
Yeah, one thing I don't see in your plan is *investing*. And I get it, you didn't have money to invest before and investing is scary and can get really complicated (though I would argue that it doesn't have to be complicated for most of us).
It's comforting to add money to a savings account and pay off a mortgage, and in both cases they're very predictable, which is great. But you are giving up return (basically like interest) in return for that predictability. Investing money in the stock market can be scary, because sometimes your investment loses value, unlike with a savings account. But there is huge potential for reward, too.
Right now savings account interest rates are so low you are effectively losing value on the money in your savings account to inflation - if you're doing home renovations, you may have noticed this already (the 0.4% interest on your savings is not going to cover the increase in the price of building materials). It's extremely important to have enough money in savings for emergencies and short-term savings, but once you pass that mark you should seriously consider investing more aggressively.
This is unfamiliar to you right now but like I say, it doesn't have to be complicated! You could start with opening an IRA at a discount brokerage like Vanguard or Fidelity (this is as easy as opening a checking account) and investing in something like a Target Date Fund (these are a mix of investments that are appropriate for you if you're planning to retire/use the funds around the Target Date, e.g. 2050). If you had invested $6,000 in the Vanguard Target 2050 fund last July ($6,000 is the annual contribution limit to IRAs for someone your age), it would be worth close to $8,000 today. Now, you don't get return like that every year, and some years the value will even go down, but in general, for money you don't need for a few years, you should consider keeping it invested so you don't miss out on gains like that.
Maybe think about, instead of contributing an extra $800 to the mortgage every month, put $500 into an IRA and $300 extra onto the mortgage (or split it however you want - you can even start just putting $100 into the IRA).
I would not rush into working with a financial planner, because there are a lot of useless (or worse) ones out there. You might actually want to start by spending some time looking through the wiki for the PersonalFinance subreddit (the actual subreddit posts/comments are an extremely mixed bag, but the wiki is sound) or the Bogleheads "Getting Started" section (very similar advice to reddit, just different in style).
posted by mskyle at 11:51 AM on July 31, 2021
It's comforting to add money to a savings account and pay off a mortgage, and in both cases they're very predictable, which is great. But you are giving up return (basically like interest) in return for that predictability. Investing money in the stock market can be scary, because sometimes your investment loses value, unlike with a savings account. But there is huge potential for reward, too.
Right now savings account interest rates are so low you are effectively losing value on the money in your savings account to inflation - if you're doing home renovations, you may have noticed this already (the 0.4% interest on your savings is not going to cover the increase in the price of building materials). It's extremely important to have enough money in savings for emergencies and short-term savings, but once you pass that mark you should seriously consider investing more aggressively.
This is unfamiliar to you right now but like I say, it doesn't have to be complicated! You could start with opening an IRA at a discount brokerage like Vanguard or Fidelity (this is as easy as opening a checking account) and investing in something like a Target Date Fund (these are a mix of investments that are appropriate for you if you're planning to retire/use the funds around the Target Date, e.g. 2050). If you had invested $6,000 in the Vanguard Target 2050 fund last July ($6,000 is the annual contribution limit to IRAs for someone your age), it would be worth close to $8,000 today. Now, you don't get return like that every year, and some years the value will even go down, but in general, for money you don't need for a few years, you should consider keeping it invested so you don't miss out on gains like that.
Maybe think about, instead of contributing an extra $800 to the mortgage every month, put $500 into an IRA and $300 extra onto the mortgage (or split it however you want - you can even start just putting $100 into the IRA).
I would not rush into working with a financial planner, because there are a lot of useless (or worse) ones out there. You might actually want to start by spending some time looking through the wiki for the PersonalFinance subreddit (the actual subreddit posts/comments are an extremely mixed bag, but the wiki is sound) or the Bogleheads "Getting Started" section (very similar advice to reddit, just different in style).
posted by mskyle at 11:51 AM on July 31, 2021
great question. i'm happy you're making double what you were before. you seem extremely financially prudent given the information you posted subsequently. i think you may be a bit disappointed tho that your change in income isn't going to change your life or even necessarily make your life easier (the numbers aren't there yet to really make that be the case). the fact that you already seem to be really careful with your money is a good thing and the reason why i think even doubling your income won't make much difference. you already have really good habits. keep them!
posted by iboxifoo at 12:07 PM on July 31, 2021
posted by iboxifoo at 12:07 PM on July 31, 2021
I suggest taking a step back. Instead of fretting about what to do with all this influx of cash, visualize what you and your partner would like your life to be like in 5, 10, 15 etc. yrs. Think of a happier, healthier future version of yourselves. Has the gardening hobby turned into a full-fledged farm? Anyone quit or scale back on their practical day job to focus more on a passion project that makes them feel more fulfilled? Are you still living in the same place?
Money is a tool to help us get closer to the life we want. But first you have to have a pretty clear picture of what that looks like. For most folks the default picture is full retirement at age 65 with grandkids running around, "finally" getting to enjoy the good life and maybe travel a bit. So most money advice is also geared towards achieving that default picture. Sounds like this is not exactly your path, so it's important to get a clear picture of that first.
For example, conventional advice is to invest money before paying down a mortgage aggressively. When comparing interest rates, this is absolutely true. But when I tried this for a few months it just didn't feel right to me. I had this low-level money anxiety and I couldn't figure out what it was. Then I realized - my personal goal is NOT "full retirement at 65," it is actually to scale back on boring but very highly paid current job ASAP, and spend more time volunteering in my community, and/or learning new skills that may not turn into a career, but just because I really like learning. Paying down my mortgage much earlier means that I could take a pay cut/work part-time, and I wouldn't lose my place. So this is more in line with my personal goals than the standard advice.
Once you know what goals you are trying to achieve, then you can filter through all of the advice on the internet and from a financial planner, with an eye towards whether it brings you closer to your goals.
posted by tinydancer at 12:10 PM on July 31, 2021
Money is a tool to help us get closer to the life we want. But first you have to have a pretty clear picture of what that looks like. For most folks the default picture is full retirement at age 65 with grandkids running around, "finally" getting to enjoy the good life and maybe travel a bit. So most money advice is also geared towards achieving that default picture. Sounds like this is not exactly your path, so it's important to get a clear picture of that first.
For example, conventional advice is to invest money before paying down a mortgage aggressively. When comparing interest rates, this is absolutely true. But when I tried this for a few months it just didn't feel right to me. I had this low-level money anxiety and I couldn't figure out what it was. Then I realized - my personal goal is NOT "full retirement at 65," it is actually to scale back on boring but very highly paid current job ASAP, and spend more time volunteering in my community, and/or learning new skills that may not turn into a career, but just because I really like learning. Paying down my mortgage much earlier means that I could take a pay cut/work part-time, and I wouldn't lose my place. So this is more in line with my personal goals than the standard advice.
Once you know what goals you are trying to achieve, then you can filter through all of the advice on the internet and from a financial planner, with an eye towards whether it brings you closer to your goals.
posted by tinydancer at 12:10 PM on July 31, 2021
The Prime Directive from /r/personalfinance that others have linked is a good guideline, and one I mostly followed when my own income increased significantly: paid off debt, started contributing to my 401k, built up an emergency fund in a HYSA.
The other thing I did when I realized I was no longer living paycheck-to-paycheck was to set up automatic bill payment for my utilities and credit cards. I'd never been able to do it before because there was always a risk of insufficient funds, and because I am quite scatterbrained, I'd often forget to pay entirely. Now bills get paid automagically and there's no risk I'll forget. I do still try to remember to pay my credit card balances in full to avoid interest charges, though--auto-payment for most credit cards pays the minimum balance, but if you make a payment first, the auto-payment doesn't happen.
Honestly though it sounds like you're already in a pretty good place, Once you've paid off your remaining debt, topped up your emergency fund, and set aside money for planned renovations, investment is probably a good next step. I'd recommend spending some time with a fee-for-service financial planner. I grew up in poverty and had to learn how to manage money the hard way myself as an adult, so investing is not something I ever really understood or thought was possible. Once it became an actual possibility, I met with a financial planner to understand my options.
Then think about the other things you've always thought might be outside of your means but are achievable to you now, and pick one or two to save up for. For me, this was international travel, much nicer and more durable furniture (I'm an apartment-dweller so furniture is my version of home renovation), a nice laptop I actually got to buy new to my own specifications (I'd always had used or really cheap ones), and a few nicer pieces of clothing.
If you have any beloved young relatives you want to help support, you could also start setting something aside for them.
posted by rhiannonstone at 12:44 PM on July 31, 2021
The other thing I did when I realized I was no longer living paycheck-to-paycheck was to set up automatic bill payment for my utilities and credit cards. I'd never been able to do it before because there was always a risk of insufficient funds, and because I am quite scatterbrained, I'd often forget to pay entirely. Now bills get paid automagically and there's no risk I'll forget. I do still try to remember to pay my credit card balances in full to avoid interest charges, though--auto-payment for most credit cards pays the minimum balance, but if you make a payment first, the auto-payment doesn't happen.
Honestly though it sounds like you're already in a pretty good place, Once you've paid off your remaining debt, topped up your emergency fund, and set aside money for planned renovations, investment is probably a good next step. I'd recommend spending some time with a fee-for-service financial planner. I grew up in poverty and had to learn how to manage money the hard way myself as an adult, so investing is not something I ever really understood or thought was possible. Once it became an actual possibility, I met with a financial planner to understand my options.
Then think about the other things you've always thought might be outside of your means but are achievable to you now, and pick one or two to save up for. For me, this was international travel, much nicer and more durable furniture (I'm an apartment-dweller so furniture is my version of home renovation), a nice laptop I actually got to buy new to my own specifications (I'd always had used or really cheap ones), and a few nicer pieces of clothing.
If you have any beloved young relatives you want to help support, you could also start setting something aside for them.
posted by rhiannonstone at 12:44 PM on July 31, 2021
You can live on 42K, so that gives you a bunch of money to put towards savings, for retirement, maybe real estate, etc. Assess your stuff. Now is a bad time to buy a car, and there are many supply shortages, but it might be nice to celebrate with quality home goods you don't have, like a couple good kitchen knives or whatever. I've made a habit of living below my means when possible, and it makes life simpler. If you debt, especially high interest (credit card) debt, paying it down is a good idea. Debt-free is pretty great. Totally agree with setting financial goals,m setting up auto-pay. Congratulations.
posted by theora55 at 1:14 PM on July 31, 2021
posted by theora55 at 1:14 PM on July 31, 2021
Reflect on what's just gone right in your career, and how you can build on that. Whether you knew it before, you now know you are a person who can double your income. There is no reason you can't double it two, three or four times again.
$170,000 (one double) is the salary of a modestly successful professional. You're already better than them in all likelihood.
$340,000 (two doubles) is where you start to need some actual talent and capacity to work, but just as likely because you picked a career path where modestly successful people simply can make more. (Dentists aren't smarter than mechanical engineers - the economy just treats them better.)
$680,000 (three doubles) is no smarter or harder working that $340,000, but requires more confidence, resilience, and willingness to keep asking for what you want until you get it.
Pretty much everyone who earns $1.36 million (four doubles) is a $680,000 person who got lucky.
posted by MattD at 1:20 PM on July 31, 2021
$170,000 (one double) is the salary of a modestly successful professional. You're already better than them in all likelihood.
$340,000 (two doubles) is where you start to need some actual talent and capacity to work, but just as likely because you picked a career path where modestly successful people simply can make more. (Dentists aren't smarter than mechanical engineers - the economy just treats them better.)
$680,000 (three doubles) is no smarter or harder working that $340,000, but requires more confidence, resilience, and willingness to keep asking for what you want until you get it.
Pretty much everyone who earns $1.36 million (four doubles) is a $680,000 person who got lucky.
posted by MattD at 1:20 PM on July 31, 2021
Your taxes will more than double, so remember that you don’t actually have double the take home salary. That will help curb your spending a bit.
You should try to max out your and your husband’s retirement accounts (401k, Roth IRA) if you can.
posted by redlines at 1:50 PM on July 31, 2021
You should try to max out your and your husband’s retirement accounts (401k, Roth IRA) if you can.
posted by redlines at 1:50 PM on July 31, 2021
Note that overpaying your mortgage is probably not the most important thing to do. I did - so I didn't take my own advice - and it's very much a judgement call about what makes you feel most comfortable, but consider your options first.
Your mortgage interest is tax deductible, so the interest rate actually cheaper than it appears (more so at higher earnings levels, in fact, because your top rate of income tax is higher). You get the money back at tax time, so it doesn't necessarily connect in your mind, but you're effectively getting a refund of some of that mortgage interest you paid in the year.
Investing the same money in an index tracker (instead of paying your mortgage down) should make you more money than today's historically low mortgage rates by a clear margin. You should make 7% a year on average in the longer term, according to history, if you buy an index tracker like VFIAX; and you should be paying considerably less than 3% interest on your mortgage, so you're in clear profit. It's a share, and its value will will wander all over the place from one year to the next, but when it gets averaged over many years that's when you pretty much always come out on top, based on history .
Also, in a crisis, you can take money out of an investment account, but it's much harder to get money back out of your mortgage/house.
I'm not saying 'do this' - that is entirely your call. But I am saying 'know your options'.
posted by How much is that froggie in the window at 2:27 PM on July 31, 2021
Your mortgage interest is tax deductible, so the interest rate actually cheaper than it appears (more so at higher earnings levels, in fact, because your top rate of income tax is higher). You get the money back at tax time, so it doesn't necessarily connect in your mind, but you're effectively getting a refund of some of that mortgage interest you paid in the year.
Investing the same money in an index tracker (instead of paying your mortgage down) should make you more money than today's historically low mortgage rates by a clear margin. You should make 7% a year on average in the longer term, according to history, if you buy an index tracker like VFIAX; and you should be paying considerably less than 3% interest on your mortgage, so you're in clear profit. It's a share, and its value will will wander all over the place from one year to the next, but when it gets averaged over many years that's when you pretty much always come out on top, based on history .
Also, in a crisis, you can take money out of an investment account, but it's much harder to get money back out of your mortgage/house.
I'm not saying 'do this' - that is entirely your call. But I am saying 'know your options'.
posted by How much is that froggie in the window at 2:27 PM on July 31, 2021
About ten years ago I increased my salary by 50%, and it was a life-changer for me. I paid off all my debts (including the mortgage) within five years. Since then I've saved a bunch. I've never been an extravagant person and I'm not into 'designer' brands, but I've been able to fly business class a couple of times (back in the day when I was able to travel) and it made a big difference to my comfort. I can spend money on experiences and memories. (Can't wait until I can travel again.)
Most importantly though, I've got disposable income to share with others less fortunate, through charitable donations (which, the UK, attract Gift Aid) and, occasionally, by personal donation to individuals who are in need.
posted by essexjan at 4:34 PM on July 31, 2021
Most importantly though, I've got disposable income to share with others less fortunate, through charitable donations (which, the UK, attract Gift Aid) and, occasionally, by personal donation to individuals who are in need.
posted by essexjan at 4:34 PM on July 31, 2021
Froggie in the window has the right advice, but keep in mind that with the standard deduction, mortgage interest is usually not deductible for most people anymore.
posted by redlines at 4:40 PM on July 31, 2021
posted by redlines at 4:40 PM on July 31, 2021
Just want to chime in about investing:
The philosophy / mental approach I would take towards investing is to think about it as a strategy to reduce your risk by diversifying your asset base. Basically - you want to avoid having all your eggs in one basket.
Let's say you have 90% of your total wealth in one asset - your house in Vermont - and something happens to it, making it unlivable. Or you have 90% of your assets in cash, and suddenly the US goes through a period of high inflation, eroding its value. Or you have 90% of your assets in Tesla, and suddenly it goes bankrupt.
Conservative investing means creating a diversified portfolio of assets which then commits you to riding its changes in value both upwards and downwards. It's not even primarily a means to "grow" your money or get rich quick - it's just a way to protect the value of your savings in the long run.
Putting everything in savings or cash is a risk too. Recall the property price rise you experienced - instead of seeing it as the value of property going up, you could also equally see it as the value of cash going down - the same $100,000 buys less now than it did before. "Not investing" - or, defaulting to socking away cash in a savings account - is absolutely just as big a risk just as much as buying stocks or property is.
Typically most people would go for a mix of local stocks and international stocks (to protect against a US recession, however unlikely, at least your international stocks are still ok). This indirectly also protects you against currency risk (in case the US dollar declines). Then you want some property (because this directly matches your future cost of accommodation). Some fixed income like government bonds, which give lower yield but certain return.
Your financial advisor (should you get one) will do all this for you, but just telling you this to get you in the right frame of mind: investing your money isn't necessary "increasing your risk" to get more return (gambling) but the real goal is to decrease your risk, and can often get you more return too than just leaving cash in your savings account or paying down your mortgage.
posted by xdvesper at 5:02 PM on July 31, 2021
The philosophy / mental approach I would take towards investing is to think about it as a strategy to reduce your risk by diversifying your asset base. Basically - you want to avoid having all your eggs in one basket.
Let's say you have 90% of your total wealth in one asset - your house in Vermont - and something happens to it, making it unlivable. Or you have 90% of your assets in cash, and suddenly the US goes through a period of high inflation, eroding its value. Or you have 90% of your assets in Tesla, and suddenly it goes bankrupt.
Conservative investing means creating a diversified portfolio of assets which then commits you to riding its changes in value both upwards and downwards. It's not even primarily a means to "grow" your money or get rich quick - it's just a way to protect the value of your savings in the long run.
Putting everything in savings or cash is a risk too. Recall the property price rise you experienced - instead of seeing it as the value of property going up, you could also equally see it as the value of cash going down - the same $100,000 buys less now than it did before. "Not investing" - or, defaulting to socking away cash in a savings account - is absolutely just as big a risk just as much as buying stocks or property is.
Typically most people would go for a mix of local stocks and international stocks (to protect against a US recession, however unlikely, at least your international stocks are still ok). This indirectly also protects you against currency risk (in case the US dollar declines). Then you want some property (because this directly matches your future cost of accommodation). Some fixed income like government bonds, which give lower yield but certain return.
Your financial advisor (should you get one) will do all this for you, but just telling you this to get you in the right frame of mind: investing your money isn't necessary "increasing your risk" to get more return (gambling) but the real goal is to decrease your risk, and can often get you more return too than just leaving cash in your savings account or paying down your mortgage.
posted by xdvesper at 5:02 PM on July 31, 2021
Just read your update about your plans to hire a financial planner. My advice is to not, since they can often smell blood and fleece you. If you find someone trustworthy and inexpensive, great. Otherwise, it’s worth spending some time reading sites like Bogleheads and taking a simple approach. Pay off debt except mortgage, maximize tax advantaged space, then put all you can into taxable brokerage accounts, along with a healthy cash savings cushion. Stay away from individual stocks unless you know what you’re doing and stick to low cost index funds for all investments. The target retirement date funds are fine if you don’t want to spend time thinking about your asset allocation.
posted by redlines at 5:05 PM on July 31, 2021
posted by redlines at 5:05 PM on July 31, 2021
I'd say the largest line of our budget now is food. I love cooking.
I would spend a few hundred bucks on the best shelf (or freezer) -stable ingredients that I could afford now and take your cooking to another level!
https://www.seriouseats.com/heres-how-we-stocked-our-kitchens-for-self-isolation
https://www.seriouseats.com/staff-picks-pantry-staples
https://www.seriouseats.com/ingredients-worth-the-splurge
Is there a non-gimmicky, long-lasting food-prep item you've always wanted (blendtec blender, sous-vide cooker, small induction heater, enamel pot for bread baking/pizza stone) etc?
see here
https://www.seriouseats.com/pro-cooking-equipment-for-home-kitchens
https://www.seriouseats.com/staff-picks-kitchen-equipment-favorite-tools
https://www.seriouseats.com/the-ten-best-kitchen-tools-gadgets-gear
https://www.seriouseats.com/equipment-5117081
posted by lalochezia at 6:14 PM on July 31, 2021
I would spend a few hundred bucks on the best shelf (or freezer) -stable ingredients that I could afford now and take your cooking to another level!
https://www.seriouseats.com/heres-how-we-stocked-our-kitchens-for-self-isolation
https://www.seriouseats.com/staff-picks-pantry-staples
https://www.seriouseats.com/ingredients-worth-the-splurge
Is there a non-gimmicky, long-lasting food-prep item you've always wanted (blendtec blender, sous-vide cooker, small induction heater, enamel pot for bread baking/pizza stone) etc?
see here
https://www.seriouseats.com/pro-cooking-equipment-for-home-kitchens
https://www.seriouseats.com/staff-picks-kitchen-equipment-favorite-tools
https://www.seriouseats.com/the-ten-best-kitchen-tools-gadgets-gear
https://www.seriouseats.com/equipment-5117081
posted by lalochezia at 6:14 PM on July 31, 2021
Nthing retirement, savings, responsible choices others have mentioned. Start a savings account for future big purchases like next car, next house, next renovation.
We just replaced a crappy mattress from grad school and it feels great! Definitely set aside some fun money to upgrade tired possessions or try a new hobby.
posted by rawralphadawg at 6:32 PM on July 31, 2021
We just replaced a crappy mattress from grad school and it feels great! Definitely set aside some fun money to upgrade tired possessions or try a new hobby.
posted by rawralphadawg at 6:32 PM on July 31, 2021
I a. Bought a new car but also b. Overpay on it every month. And had a much bigger down payment.
Before that, I paid off all my debt, took one really nice vacation, and saved the rest.
85k is a nice salary but not mega rich. Keep your careful spending hat on.
posted by emjaybee at 8:15 PM on July 31, 2021
Before that, I paid off all my debt, took one really nice vacation, and saved the rest.
85k is a nice salary but not mega rich. Keep your careful spending hat on.
posted by emjaybee at 8:15 PM on July 31, 2021
I went through something similar to you with a similar doubling of income, at a somewhat younger age. What I did, and what I'm glad I did, was avoid (as mentioned above) the hedonic treadmill. My spending has gone up, but it's gone up consciously; I've increased my normal cost of living a few times, but each time I've thought about it and decided it's worth it.
I have a series of accounts (all at the same high interest savings online bank); there's the cash one that gets my paycheck in and my day to day spending out. A couple of days after payday, I have automatic transfers set up to move money to two accounts; one is a retirement account -- a holding account before moving money every few months to an investment account (just so I'm not doing it so often). This has been talked about tons above; I can't agree enough with something like the Vanguard Target Date for you.
My second account is a deliberate spending account. That's where I put money to accumulate before spending it on out-of-the-ordinary things I want. In my case, that's mostly travel and occasionally tech or I'm looking at a new bike. In your case, it sounds like home improvements. I put about 10% of my take-home and 5% of windfalls into this account.
The nice thing about splitting everything up like this is that it sets up everything with a purpose. My normal account only needs to have enough money to last the month; luckily that can start at roughly what you were spending before. The retirement account is off in it's own world, and doesn't need to be worried about until that date. And then there's a place for spending for bigger things; it doesn't get frittered away on another little gadget or something if it's mixed with the normal account; I'm not shortchanging my retirement; and it grows on a regular basis so I can plan and make tradeoffs -- do I want a big trip next year or a short one now?
I set these up with the first paycheck after the jump in income; my pay has gone up a little (although not in a few years) so at this point, I'm putting about 50% of my take-home income into retirement (I started at around 40%.)
We do have two big ticket plans but they're something we've wanted a long time. A geodome greenhouse for me and a small outdoor sauna for him. As homebodies, and as an avid gardener in zone 5, these are investments to us.
Wrong. These aren't investments to anybody. They sound like very well considered expenses; I'm sure you will both get great use and years of pleasure out of them. In your shoes, and with your priorities, I'd probably do the same thing. But be clear -- these are expenses, not investments. Mentally mixing up your expenses and investments is a great way to eventually have 100% expenses and 0% investments.
Actually, maybe this is the change you were asking about -- these new expenses for big ticket things that are pleasurable but not necessary? That's one of the wonderful things about moving to a higher income level.
posted by Superilla at 1:46 AM on August 1, 2021
I have a series of accounts (all at the same high interest savings online bank); there's the cash one that gets my paycheck in and my day to day spending out. A couple of days after payday, I have automatic transfers set up to move money to two accounts; one is a retirement account -- a holding account before moving money every few months to an investment account (just so I'm not doing it so often). This has been talked about tons above; I can't agree enough with something like the Vanguard Target Date for you.
My second account is a deliberate spending account. That's where I put money to accumulate before spending it on out-of-the-ordinary things I want. In my case, that's mostly travel and occasionally tech or I'm looking at a new bike. In your case, it sounds like home improvements. I put about 10% of my take-home and 5% of windfalls into this account.
The nice thing about splitting everything up like this is that it sets up everything with a purpose. My normal account only needs to have enough money to last the month; luckily that can start at roughly what you were spending before. The retirement account is off in it's own world, and doesn't need to be worried about until that date. And then there's a place for spending for bigger things; it doesn't get frittered away on another little gadget or something if it's mixed with the normal account; I'm not shortchanging my retirement; and it grows on a regular basis so I can plan and make tradeoffs -- do I want a big trip next year or a short one now?
I set these up with the first paycheck after the jump in income; my pay has gone up a little (although not in a few years) so at this point, I'm putting about 50% of my take-home income into retirement (I started at around 40%.)
We do have two big ticket plans but they're something we've wanted a long time. A geodome greenhouse for me and a small outdoor sauna for him. As homebodies, and as an avid gardener in zone 5, these are investments to us.
Wrong. These aren't investments to anybody. They sound like very well considered expenses; I'm sure you will both get great use and years of pleasure out of them. In your shoes, and with your priorities, I'd probably do the same thing. But be clear -- these are expenses, not investments. Mentally mixing up your expenses and investments is a great way to eventually have 100% expenses and 0% investments.
Actually, maybe this is the change you were asking about -- these new expenses for big ticket things that are pleasurable but not necessary? That's one of the wonderful things about moving to a higher income level.
posted by Superilla at 1:46 AM on August 1, 2021
(Small side note from another northern rural area: a greenhouse can (though isn’t automatically) absolutely be an investment in the classical capitalist sense. It is a necessary tool for production of food at scale in our climes, so can potentially save on household budget in the long run, or could be a capital requirement for a business enterprise. A sauna might be as well, if it increases the value of the house/property, which depends on how other people/“the market” values saunas. I agree with the rest of Superilla’s comment though.)
posted by eviemath at 4:14 AM on August 1, 2021
posted by eviemath at 4:14 AM on August 1, 2021
> I’m curious what changes others made if they’ve been through the same thing?
10 years ago, I made 30k/year and took a job elsewhere into in IT role that effectively doubled my wage. And then again just three years ago, I went from being laid off at a government job making 60k a year to making 200k a year (and I'm on track to earn 400k this year). I've been through the 'salary doubled' event twice (or thrice!), and they're different things entirely each time.
Part time work: 30k
When I was earning 30k, money was tight. Debt payments (student loan, car) were a challenge. In grad school I started tracking finances in GNUCash because it sounded like a responsible thing to do. I opened up a Roth IRA, and funded it. When the recession hit and I quit grad school, I ended up withdrawing some of that Roth money to live on, so in many ways I was maybe prioritizing wrong, but it helped me build framework to think about these things.
But, I had a lot of spare time! I would binge watch Great Lectures over holiday breaks, contribute to open source projects and generally enjoyed the nerd hobbies.
Full time role: 30k - > 60k
Getting a full time offer was a huge change. I stopped living with roommates, bought new furniture, started contributing to a 403b, etc. I built my first annual budget spreadsheet. During this time my mom was unwell and ended up being foreclosed upon. I make time to study books on the side and for about a year there I was largely focused on NOLO press books and the foreclosure process.
Eventually I took a new job making roughly the same in a new state, and discovered that between the furlough(!), cost of living, state income tax rate, and union fees, it was kind of a cut in pay. But it was a more valuable professional experience so no regrets. Lesson learned was to do a better job modelling taxes in the budget spreadsheet. At one point I decided to max out the 403b and 457 to qualify for PSLF, as I needed to reduce my modified AGI and maxing those out does that. To fund that I cut some costs -- stopped contributing to the Roth IRA, cut cable, bought a cheaper parking permit, and did some price shopping on car insurance. Ended up with something like a 50 percent savings rate.
As far as hedonic purchases go:
- Started buying more expensive cuts of meat for dinner prep
- bought a 700 dollar Roomba to sweep while I'm at work
- dual recliner couch
- started a board game collection
- a vollrath nonstick pan, back when consumers could buy them
- I wish I could tell you about all the dental work I had done, but I am a huge baby about dentists and avoided the problems for far too long. nth-ing the advice to go early go often as tooth problems don't get better on their own and are really not as expensive as medical bill horror stories you hear about
BigTech role: 60k -> 200k
In the end, the department itself was underfunded and laid off all but one full time employee (poor bastard). I took a new job at BigTech, and tripled my wages. The huge jump in standard of living is from 30k-60k; I live more or less as I did before, just with an extra zero. First thing I did was pay off the student loan with my signing bonus. Second thing I did was sign a lease on an apartment that cost roughly what my annual salary was a decade ago; the complex has lots of amenities so on that front it's a bit of a step up but the home itself is the same size as before. I used the severance money I had been holding onto during unemployment to increase the emergency fund to match the new CoL, and set up a CD ladder. I'm now moving that into I Bonds, which I should have done all along.
Taxes are a huge cost now. So max out every possible tax advantaged salary deferral I can find -- HSA, 401k, mega backdoor, ESPP, etc. I opened up a taxable brokerage account for the first time, to invest surplus cash into. Having the spreadsheet model income taxes is still super helpful in budgeting, The people who say sticking to a budget is more important when you make more money are wrong at this scale. I could fuck up my discretionary expenditures by 10 percent and not even notice or disrupt the plan beyond the size of the brokerage deposit being a bit smaller. The budget's purpose now is to predict taxes, and ballpark estimate the rest. I don't even pretend to keep monthly budgets. My problem no longer is having enough money, but just having enough in the right place at the right time. Getting it wrong incurs more paperwork during tax season, and probably additional taxes paid.
Income is very feast or famine; elective deferrals all come from salary only, and equity is half of my total income. But only four months out of every year have an equity sale, and quarterly estimated tax payments don't match that schedule at all. Future Minimum balance forecasts are very important, and even annual budgeting needs an error bar, similar to your husband's fluctuating income. I plan for equity income to be about 80 percent of its value at the start of the year, in case the market turns against my employer.
Family support has become a bigger expense -- I've had to help my brother reboot his life, and mom is going through a tight spot with cash since she can't work for a while post-knee surgery. I put in my annual budget a decent amount to help them out with, and help them max out their own IRAs. There's a certain amount of risk here that they're going to end up more dependent on on me every time I help them out, but I don't see a better option.
Hedonistic purchases:
- Airpods
- a thousand dollar adjustable office chair (this ballpark what durable office chairs legit cost though), and some silent rolling casters
- board games that cost like 90 dollars each
- amazing tableware, and Corelle dishware, and enough to fully load the dishwasher and still be able to eat
- a kindle to read books & papers with less wrist strain and less direct light at night
- the expensive yogurts at the grocery store
- lunches at sit down restaurants, back before those were banned
- I will be paying for upgraded seats and direct flights from now on, assuming travel is like, allowed in 2022, because my experience in 2019 sucked
- an expensive set of sheets from LL Bean
- probably some new furniture to replace that stuff I bought a decade ago
- setting the thermostat to 72 degrees
Conclusion
This is a journey of a thousand steps. I didn't know all this when I started. Every year I got a bit better at some aspect, whether it was budgeting, tax planning, foreclosure law, double entry accounting, or investing. You don't have to be perfect from the start, but it does pay to be thinking about this systematically on a regular basis, and sometimes fortune favors the prepared -- GNUCash isn't really a requirement for a grad student but is now my only hope of keeping track of this complicated mess of financial accounts. Probably the most important thing you can do is set aside an hour a week (or a 4 hour block every month) to learn and improve, and keep a todo list of things you want to read / learn.
posted by pwnguin at 1:16 AM on August 2, 2021
10 years ago, I made 30k/year and took a job elsewhere into in IT role that effectively doubled my wage. And then again just three years ago, I went from being laid off at a government job making 60k a year to making 200k a year (and I'm on track to earn 400k this year). I've been through the 'salary doubled' event twice (or thrice!), and they're different things entirely each time.
Part time work: 30k
When I was earning 30k, money was tight. Debt payments (student loan, car) were a challenge. In grad school I started tracking finances in GNUCash because it sounded like a responsible thing to do. I opened up a Roth IRA, and funded it. When the recession hit and I quit grad school, I ended up withdrawing some of that Roth money to live on, so in many ways I was maybe prioritizing wrong, but it helped me build framework to think about these things.
But, I had a lot of spare time! I would binge watch Great Lectures over holiday breaks, contribute to open source projects and generally enjoyed the nerd hobbies.
Full time role: 30k - > 60k
Getting a full time offer was a huge change. I stopped living with roommates, bought new furniture, started contributing to a 403b, etc. I built my first annual budget spreadsheet. During this time my mom was unwell and ended up being foreclosed upon. I make time to study books on the side and for about a year there I was largely focused on NOLO press books and the foreclosure process.
Eventually I took a new job making roughly the same in a new state, and discovered that between the furlough(!), cost of living, state income tax rate, and union fees, it was kind of a cut in pay. But it was a more valuable professional experience so no regrets. Lesson learned was to do a better job modelling taxes in the budget spreadsheet. At one point I decided to max out the 403b and 457 to qualify for PSLF, as I needed to reduce my modified AGI and maxing those out does that. To fund that I cut some costs -- stopped contributing to the Roth IRA, cut cable, bought a cheaper parking permit, and did some price shopping on car insurance. Ended up with something like a 50 percent savings rate.
As far as hedonic purchases go:
- Started buying more expensive cuts of meat for dinner prep
- bought a 700 dollar Roomba to sweep while I'm at work
- dual recliner couch
- started a board game collection
- a vollrath nonstick pan, back when consumers could buy them
- I wish I could tell you about all the dental work I had done, but I am a huge baby about dentists and avoided the problems for far too long. nth-ing the advice to go early go often as tooth problems don't get better on their own and are really not as expensive as medical bill horror stories you hear about
BigTech role: 60k -> 200k
In the end, the department itself was underfunded and laid off all but one full time employee (poor bastard). I took a new job at BigTech, and tripled my wages. The huge jump in standard of living is from 30k-60k; I live more or less as I did before, just with an extra zero. First thing I did was pay off the student loan with my signing bonus. Second thing I did was sign a lease on an apartment that cost roughly what my annual salary was a decade ago; the complex has lots of amenities so on that front it's a bit of a step up but the home itself is the same size as before. I used the severance money I had been holding onto during unemployment to increase the emergency fund to match the new CoL, and set up a CD ladder. I'm now moving that into I Bonds, which I should have done all along.
Taxes are a huge cost now. So max out every possible tax advantaged salary deferral I can find -- HSA, 401k, mega backdoor, ESPP, etc. I opened up a taxable brokerage account for the first time, to invest surplus cash into. Having the spreadsheet model income taxes is still super helpful in budgeting, The people who say sticking to a budget is more important when you make more money are wrong at this scale. I could fuck up my discretionary expenditures by 10 percent and not even notice or disrupt the plan beyond the size of the brokerage deposit being a bit smaller. The budget's purpose now is to predict taxes, and ballpark estimate the rest. I don't even pretend to keep monthly budgets. My problem no longer is having enough money, but just having enough in the right place at the right time. Getting it wrong incurs more paperwork during tax season, and probably additional taxes paid.
Income is very feast or famine; elective deferrals all come from salary only, and equity is half of my total income. But only four months out of every year have an equity sale, and quarterly estimated tax payments don't match that schedule at all. Future Minimum balance forecasts are very important, and even annual budgeting needs an error bar, similar to your husband's fluctuating income. I plan for equity income to be about 80 percent of its value at the start of the year, in case the market turns against my employer.
Family support has become a bigger expense -- I've had to help my brother reboot his life, and mom is going through a tight spot with cash since she can't work for a while post-knee surgery. I put in my annual budget a decent amount to help them out with, and help them max out their own IRAs. There's a certain amount of risk here that they're going to end up more dependent on on me every time I help them out, but I don't see a better option.
Hedonistic purchases:
- Airpods
- a thousand dollar adjustable office chair (this ballpark what durable office chairs legit cost though), and some silent rolling casters
- board games that cost like 90 dollars each
- amazing tableware, and Corelle dishware, and enough to fully load the dishwasher and still be able to eat
- a kindle to read books & papers with less wrist strain and less direct light at night
- the expensive yogurts at the grocery store
- lunches at sit down restaurants, back before those were banned
- I will be paying for upgraded seats and direct flights from now on, assuming travel is like, allowed in 2022, because my experience in 2019 sucked
- an expensive set of sheets from LL Bean
- probably some new furniture to replace that stuff I bought a decade ago
- setting the thermostat to 72 degrees
Conclusion
This is a journey of a thousand steps. I didn't know all this when I started. Every year I got a bit better at some aspect, whether it was budgeting, tax planning, foreclosure law, double entry accounting, or investing. You don't have to be perfect from the start, but it does pay to be thinking about this systematically on a regular basis, and sometimes fortune favors the prepared -- GNUCash isn't really a requirement for a grad student but is now my only hope of keeping track of this complicated mess of financial accounts. Probably the most important thing you can do is set aside an hour a week (or a 4 hour block every month) to learn and improve, and keep a todo list of things you want to read / learn.
posted by pwnguin at 1:16 AM on August 2, 2021
Also, just because it feels like this thread is heavy on the "how to get as rich as possible from your current richness"... you don't have to dedicate yourselves to doubling your incomes forever or maximize everything as an investment. It's ok to just be a person. It's ok to just invest in yourself and your life.
posted by We put our faith in Blast Hardcheese at 7:24 AM on August 2, 2021
posted by We put our faith in Blast Hardcheese at 7:24 AM on August 2, 2021
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posted by kevinbelt at 7:32 AM on July 31, 2021