Work out the new take-home amount
Use the new take-home pay, not the gross increase in your offer letter. Deductions can change with a hike, so check your first payslip before you rely on the new figure.
Decide where the extra goes
A simple rule is to split the increase: part to savings, part to goals such as an emergency fund, and a small part to a better lifestyle. In an example with a ₹5,000 monthly increase, ₹3,000 could go to savings and ₹2,000 to spending.
Update the plan straight away
Enter the new salary from the month it starts. Raise the savings amount at the same time, so it does not stay at the old level by default.
- Use new take-home pay
- Split the increase on purpose
- Raise savings at the same time
- Check the plan after the first payslip
Questions people ask
Should I spend a raise on a bigger flat or car?
Only if the new monthly cost fits the plan with room for savings. Add it as a fixed bill first and check the money left.
How much of a hike should go to savings?
There is no fixed figure. Many people save a good share of the increase. Use the savings calculator to set a target.
Does budgetbaba help with this?
Yes. Enter the new salary for the month and see how the money left changes.