What to do with every raise

Lifestyle creep — the slow expansion of spending to fill every raise — is the single biggest reason high earners don't end up wealthy. The fix is embarrassingly simple: save half of every raise before you notice the raise.

The half-raise rule

When you get a raise, increase your 401(k) contribution or automatic savings transfer by half of the raise amount. You pocket the other half. You feel richer (because you are). And your savings rate slowly climbs over your career without ever feeling like a sacrifice.

Why it works

It hijacks the hedonic treadmill. You feel the raise (because lifestyle still goes up), but you capture compounding savings at the same time. It's one of the few financial rules that respects the psychology of adapting to new income levels instead of fighting it.