Why you can’t always bank the increase in your salary

Over the last couple of years I’ve read a lot on the FI approach. I mean… a LOT! There is always a constant challenge of reducing expenses and increasing earnings. I went for increasing my earnings, but not by a side hustle, but by investing in myself.

I’ve put in the work, learnt stuff, pushed to go on courses and get professional qualifications and built up as much as I can to be an expert in my field (non financial services before you ask). This has meant that over the years my salary has continued to trend upwards which has been great, although I haven’t done so well at keeping my lifestyle inflation in check.

A lot of what I have read out there is as soon as the pay rise comes in, it’s immediately banked into the savings collection somewhere. I have even done that myself over the last few years which is helping, but I have found there are challenges in banking 100% of any increases. I am fully expecting a whole bunch of comments (assuming people still visit!) rubbishing this post and saying of course you can bank it all, but it’s simply not my experience, and I will explain why. I could argue that this is investing in myself for all of them, and to a degree this is true, but it is what it is.

One of the key things for me is networking – basically going down to the pub / coffee shop / a meal out etc. with current and former colleagues and friends you know and catching up. It may seem odd that you end up spending a few rounds of beer, and nothing much happens, however you never know. I haven’t had to look for a job in years, they have all come via my contacts, so in a sense it works very well compared to the effort of updating a CV, dealing with headhunters etc.

On a reasonably regular basis then I often find myself stumping up some cash for a round or three with people, but it is worth it. If you are just starting out in the work, and your aim is more career than side hustles, the one piece of advice I will give is this…. Network. Network, network network. People get to know you, and you become front of mind for things. I’ll do a whole post on networking at some point!

The second challenge is the inevitable team drinks. It is not only expected that I will go out with the teams, but that I will also always buy the first round, regardless of if I can expense it or not as a thank you for the team and the work they have done. You always expect the most senior person to pick up the tab, and these days that is normally me. It’s great if I can put things on my reward credit cards as I get something back, but there are things I can’t claim back (e.g. a tip) and sometimes not even the round of drinks, it comes out of my own pocket. As such, especially in a fast paced environment, compared to years ago, I couldn’t bank everything.

Sure – I could not go or not buy the first round, but that would impact on me professionally. You get far more out of people if you can build that relationship, reward them for the work they have done. I do know people who take the approach of not ever going out, but then you find people won’t want to work for that person or be part of their team, it makes it much harder for the day job.

Have you been able to bank all of every pay rise you have received?


Author: fireinlondon

Fighting the high cost of living in London

8 thoughts on “Why you can’t always bank the increase in your salary”

  1. I think you’re doing the right thing, FiL.

    The networking is part of your work (despite being in a social setting), so could probably be seen as ‘investing in yourself’.

    I’m not bad at keeping in touch with ex-colleagues and I try to attend all work organised events. Attending Huw’s FIRE Escape gatherings were a great networking opportunity too!

    As for banking all increases in salary, paying for networking won’t my issue but just normal living expenses creeping up and if it continues this way, my spending will be going up. I now can’t see how I was able to keep to a grocery budget of <£25 every week for most of last year. Ok, so my alcohol spending has gone up since I've not been homebrewing but even ignoring that, my grocery bill is just higher these days.

    So I won't be consciously banking the entire increase (if I get one) but I'd certainly be banking some of it.

    Liked by 1 person

    1. Hi Weenie,

      Thanks for stopping by and the vote of confidence! Yes Networking is a huge element of life as it stands (as I say, another post to come on that!), so it does help me in the longer term.

      I didn’t manage to get to the FIRE Escape gathering although I would love to – one of the times I will make it 🙂 For me there are some work events that aren’t optional so I don’t have a choice but then I know when the situation is flipped around I appreciate those who put their time in so it is worth it.

      I have to say I was always in awe of your <£25 a week food budget! I have found since utilising my other half's ISA and in effect buying a pay rise every month, albeit it small, is providing that buffer now which is helping.
      Have you found out what the root cause of the higher bill is? Larger portions, more avacado on toast? 😉

      I have to say with the combination of GTP ISA and my other half's I am pushing harder to replace salary income with other, and so build the capital with my salary but I still have a long way to go!


      1. Avocado toast…I make my own, although occasionally, I buy it at the gym restaurant at £5 a pop (although it also includes two poached eggs) but I have that as a ‘main meal’ as opposed to a snack. I think the grocery bill’s gone up partly due to the disruption in my kitchen meaning that I’ve not been able to plan my meals properly. Need to get back to my batched cooking and freezing etc!


        1. To be fair, sounds similar to Eggs Florentine and for £5 that isn’t too bad (I don’t think!). Sometimes it’s also nice to have a small treat, as long as it isnt every time you go to the gym 😉
          Ah yes, lack of, or reduce cooking ability is definitely going to hamper things when it comes to meal planning – hopefully not much longer?!


  2. I think some advice out there is overly simplistic that is for sure.

    Yes, so they in their exact and unique situation could bank their whole pay increase very easily, that doesn’t mean that the rest of the world can, as you have nicely pointed out.

    Most of my pay rises up to the age of 30 were simply spent on getting to the point where we were living in our own flat and had furnished it…!!! Yea we had loads of holidays as well and probably inflated the lifestyle but that’s what we wanted to do at the time, no regrets at all on any of it.

    Now my issue is trying to continue to save whilst getting a pay decrease haha… try that one for size and see how you get on 😉

    Personally I hate “networking” although I can totally see the benefits of it and wouldn’t put anyone of it of course if they were trying to go down a similar path to yourself. Going out for beers with friends or colleagues though, that’s great. I get the feeling that much of the FI crew are introverted and so would also not like networking, maybe even either version of the above (again that’s how easy it will be to bank their pay rises. If you don’t like going out then it’s easy to not spend money going out right?)

    Maybe it’s just the terminology of it that I don’t like? Networking sounds like you are only doing it for personal gain but I know that’s not what you are getting at when you say that word.

    I think it’s just got negative connotations for me, like when I had to go to a big conference in Barcelona, the city was of course great, the little I saw of it at least, but going around making small talk to a bunch of people I would likely never see again was incredibly boring. But again I know that’s not what you mean when you say the word.



  3. Hi TFS,

    Yes – I think people always assume that you can bank everything but that just doesn’t work for me. The important thing for me was finding a balance that works for you – like yourself I used a lot up for holidays. Could I be FI now if I hadn’t? Yes. Would I have regretted it? Yes. I would have missed out on things that you can no longer do.

    I don’t envy you trying to continue saving whilst taking a pay cut – that has got to be a tough one, and not one I particular wish to try 😉

    I have to say Networking is not my favourite hobby for sure but it is important. Some of it is a little towards personal gain – I a doing it to keep in touch with people as you never know what the future holds, but may not always be people that I would necessarily socialise with as a friend. Having said that some of my best friends have come through work so you never know 🙂
    I’ll have to work on getting the networking post written 😉



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