My expression when I heard the news!
I GOT A RAISE!!!
Omg, guys! Ok. Technically, it’s not a raise. It’s a “salary/equity adjustment”.
An equity adjustment is a permanent increase to the base salary that may be granted to an employee under certain circumstances, such as increased duties that do not warrant a reclassification or a significant salary lag to comparable internal positions or the local labor market.
It’s a little over 12%, but, combined with the yearly cost of living adjustment I got a couple of months ago, my base salary will be about 15% over what I was making last year. I. am. stunned! I didn’t think it was even possible. I’m still not ‘well paid’ for my industry by any stretch, but I’m at least juuust inside the edge of market rate now.
I’m passing “Go” and collecting $200!
How did this happen?
My manager just dropped the news during our scheduled weekly check-in meeting out of the blue. I had no idea any of this was happening. My manager felt bad about my below market salary, but really couldn’t do anything about it because salaries are set by division heads and HR. My manager was not a part of the discussions of salary when I was hired, and I did not negotiate well because I was unemployed and desperate at the time.
My division is doing some job title reclassification with HR and there are plans to hire someone else in my role to work with me at my location. This gave my manager an opening to push the higher ups to get my salary adjusted, otherwise I’d be making noticeably less than a newer, more junior hire.
A REAL raise this time!
I don’t know if my manager picked up on the fact that I’ve been interviewing for other jobs as the reason I’d been missing work recently, but the timing of this adjustment is perfect. I feel less inclined to leave now. In leaving for another company, I always worry about the unknown of a new working environment when I still have so much debt. I worry about the possibility of ending up in an even more stressful situation. Plus, the benefits and flexibility are rather good here. Don’t get me wrong. I’m still going to keep my eyes open, but I don’t feel pressured to jump elsewhere. I can see myself staying for at least for another year or so, unless some amazing job falls in my lap.
Feelin’ like a fat cat!
What to do with the new $$$?
Well, first, I’m not getting too excited since about half of the raise will go to taxes and other required deductions off the top. I will know how much I get to keep in my paycheck once the new pay rate kicks in, probably as early as the next pay cycle. I’m not sure what to do with the money once it starts trickling in, though.
Right now, I know I have two options… DEBT or ROTH IRA
Do I use the extra money to throw at my student loan debt or do I put it toward funding my Roth IRA?
Debt – My interest rate is now approaching 5%, which is the cutoff for when it makes sense mathematically to prioritize debt. I need this debt gone so there is the emotional benefit too. Without the debt payment, I can finally afford my own place and save up a fully funded 1 yr emergency fund. You know, actually move on with life.
Roth IRA – Investment savings are the path to retirement. The more I put in, that runway to financial independence shortens, even if inch by inch. I have been contributing extremely little to my Roth in recent years.
You may ask, ¿Por qué no los dos? And you’d have a great point. I may indeed end up doing both – maybe something like 50% toward student loans, 30% toward Roth IRA, and 20% toward my spending allowance? I know I should be shrinking my monthly spending, not increasing it, but I still haven’t found a way to keep my allowance spending below it’s current limit. I’ll keep thinking about it.
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Regardless of what I decide, having a few dollars more in each paycheck is cause to celebrate.
This is me at work right now…
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Have you ever gotten a surprise pay increase? What did you do with it?
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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW Archives)
Double Debt Single Woman 
Great news! That must have been SO encouraging. What’s even better is seeing that you will be dropping below $50,000 before you know it!
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Yes, it is encouraging. Yay! Thanks, Isabella. 🙂
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Congratulations!!!! Either way the money will be used for a good purpose. I have gotten surprises raises at work 3 times. Totally unexpected each time.
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Thanks. Yeah, you’ve been getting some good increases. I hope it has helped to mitigate some of the frustrations you’ve had to deal with relating to working with certain people in your office, or rather ‘not working’ with. heh
It’s a good feeling to get a pay increase. 🙂
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Woo-hoo! Could you possibly have imagined coming this far when you were starting with over $140,000 of debt?
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Woo-hoo, indeed! 🙂
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Congratulations! I got a small surprise bonus last year – surprised because I was still a few months into my new job. I just put it toward debt. This year I plan on putting any increases toward retirement so that my net take up remains the same.
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That was good discipline to put it all toward debt. It’s also good that you’re balancing your attention between debt and retirement savings.
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This is the best news!! Congrats!
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Thank you! It’s been a loooong wait.
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That is SUPER news. And I vote for all on debt. Get back to those $2300+ payments and this thing’ll be gone in no time. You’ll be under $50K next month! Congratulations on this!
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Thanks! 🙂
I have to admit, I am leaning towards throwing it at the debt. I’m sooo ready to start getting traction again with larger payments. I’ve been off the wagon for several months.
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YAY! “Pennies from heaven,” my grandmother would say. What an awesome feeling to get good news like that – I bet you went home with a spring in your step. 🙂
My vote is to throw it at the debt too, in the interest of breaking out of debtor’s prison sooner.
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It was an awesome feeling! So unexpected.
And another vote for debt. Thanks!
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Guess I’ll be the oddball, but I’d split between debt and savings. From personal experience I know paying off the student loans is a mountain top moment. But you need time for compound interest in your Roth. You’ll get there with the SL. In the grand scheme of the SL you’re rounding third base. As my nephew says, “Don’t bunt when you see the home run leave the pitcher’s hand.” Cheering you on.
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Yep. I’m thinking about it. I am contributing to my 401k, so it’s not like I’m saving nothing, but it would be nice to take advantage of any tax advantaged accounts while they are available. Roth IRA space is use it or lose it every tax year. Thanks for the cheers! 🙂
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I vote for throwing it all to debt as well. The whole reason you’ve been underpaid up to this point was because you were desperate at negotiations because of your debt. Debt has kept you from getting what you were worth so punch that student loan in the face. Have you calculated how much time you could take off your repayment plan by doing this? That might be a motivating factor.
I’m all for celebrating raised but let’s remember that this is actually because you were forced to take a lower pay and sold yourself short. Get rid of the debt so you never have to sell yourself short again!!
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You are preaching to the choir. Don’t worry, the debt will get hit regardless!
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Congratulations with the raise! That is great news! I would prefer to pay of the debt faster, but you have to do what feels right for you.
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Thank you. 🙂 I will add more to my debt payments no matter what. It’s just a matter of how much more.
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Wow, that is amazing news, I’m so happy for you! This is so exciting!
My mind tends to lean more in the ¿Por qué no los dos? direction. On the other hand, if your student loan interest is approaching 5%…That’s a lot. Still, I don’t think I could have handled not doing some kind of split, but that’s just me.
If I remember correctly, you had some goals for your retirment savings for last year that didn’t work out because you thought you might need the money if you had to move. Or maybe I have things mixed up. But if not, a suggestion would be to put the amount needed to catch up with your goal (to the degree that’s possible) towards your Roth IRA.
In any case, you gotta do what feels right for you. 🙂
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Thanks! 🙂 Yeah, my whole rent situation is not resolved yet, but may be soon. That will help put some stability back into my monthly spending plan.
On the fence about refinancing again to get a lower rate.
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SO excited for you! The universe is rewarding you for all your hard work and sustained discipline. After 3 long sacrifice years, I paid off over 70K in debt and have been reveling in my freedom ever since! I am finally at peace- something I didn’t fully understand until I got here. No more anxiety and sleepless nights! I love your blog and it cheered me on as I slogged through my own debt-payoff journey. Keep at it sister- someday soon you will enjoy this sweet reward too. Many blessings to you!
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Awww. Thank you for the kind words. It always makes me happy to know that this blog is helping others. 🙂
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Congrats!
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Thank you and welcome! 🙂
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