Wealth will only bring you misery and unhappiness. You should give your excess money to me.
PM for my mailing address.
Seriously - If you've been used to a reduced income and now suddenly find yourself with a lot more you should do two things:
1) Invest the bulk of it towards your retirement, marriage, eventually buying a house or some other major life event. It is good that you're not blowing the money, but you should put it to work. You should fully fund an IRA (possibly a Roth, do some reading and see which of the two IRA types will work best for you.) If your new job has a 401(k) or similar retirement account, invest the maximum. If not, open an investment account through a bank or brokerage. Either way, decide on your goals and your investment horizon (how long before you expect to draw the funds out?) Then pick an appropriate mix of equities (stocks), bonds, etc. A good mixed mutual stock fund tied to one of the major indexes is a good way to "buy the whole market" and not worry about the individual components. Professional manager tweak these funds as needed, and over time nothing touches the stock market for rate of return.
2) Throw a smaller amount of the money - say 10% to 20% of your first year's salary increase - in a regular savings or short-term money market account or 6 to 12 month CD. At the end of that time, take the money out and go nuts. Buy the toys. The thing about not going nuts when you suddenly have money available is that you probably haven't conquered the impulse to do so, you've just repressed it. Sooner or later it is going to burst forth, and you're liable to go
really nuts. Setting a targeted amount aside and giving yourself permission to go crazy with it both satisfies and controls the impulse to do so. It is like like a dieter setting aside one meal a week or one day a month to eat whatever he/she wants. Controlled cheating. I used to work for a law firm that ended up doing trusts and the like for a great many people who inherited wealth unexpectedly, won lotteries, or otherwise came into money out of the blue and that was always part of the advice: Give yourself a reasonable amount of "mad money" and by the sports car or the insane stereo or those granite countertops. Then get on with the serious business of living and enjoying life.
I've been through some rough economic times myself in the past five years. As of last year I was making about half of what made in 2000, had had to sell my house and downsize to a condo, and generally tighten my belt. I am now working my way back up the economic food chain and I as I do I'm more inclined to make improvements to the condo, and keep living within my current means and just invest the "extta", as I start making it, for the future.
Regards,
Joe
