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I Got a Real Raise This Year and Still Feel Broke. What's Going On? · Becoming Financially Confident

• 0:00
  You got a raise this year, a number on paper.
• 0:02
  That should feel like progress.
• 0:05
  So why does your bank account feel just as tight as it did last year?
• 0:09
  Well, today let's find out where the raise actually went and make sure the next one doesn't disappear the same way.
• 0:14
  Now, I'm going to tell you right now, this isn't just a feeling.
• 0:17
  There are two real specific reasons this is happening to a lot of people.
• 0:22
  But the best part of that is both of these are fixable once you can actually see them.
• 0:26
  So stay with me today and let's track down where that money really went and make sure you stay till the end, because I have a big announcement to make at the end of the show.
• 0:43
  Hello and welcome to Financially Confident Christian.
• 0:46
  My name is Ralph Estep Jr.
• 0:47
  And I just want to thank you for joining me today.
• 0:49
  Today is one of those topics that hits close to home for so many of us, and that's why a real raise can still leave you feeling just as broke as before.
• 0:58
  And we got a great listener question today.
• 1:01
  Listener asks, where did the extra money actually go?
• 1:04
  And then he takes a little deeper and says, is this normal?
• 1:06
  RALPH and how do I make sure my next raise actually helps?
• 1:11
  And I feel for him in this one.
• 1:13
  It's that feeling of getting good news on paper and still feeling that same financial squeeze.
• 1:19
  It's confusing and and yes, it's honestly a little discouraging.
• 1:23
  And if you've got a question for the show, I would love to answer your question on the show.
• 1:27
  You can reach me by going to FinanciallyConfidentChristian.com/question.
• 1:33
  We'll put a link in the show notes, but again, that's financiallyconfidentchristian.com/question.
• 1:39
  Let's get right to today's listener question.
• 1:41
  Listener writes this hi, Ralph, I got a genuinely solid raise at work this year, something I worked hard for and was really excited about.
• 1:50
  But a few months in, I'm looking at my bank account and I honestly don't feel any different than I did before the race happened.
• 1:58
  RALPH I haven't made any huge purchases or done anything I'd call reckless.
• 2:02
  Just groceries, gas and the regular life all feel more expensive than they used to.
• 2:07
  So maybe that's what's eaten on to it.
• 2:10
  But I also wonder if I've just quietly let my spending creep up without really noticing.
• 2:15
  I don't know if this is normal or if it's something I'm doing wrong.
• 2:19
  RALPH how do I figure out where this raise actually went and how do I make sure the next one doesn't disappear the same way.
• 2:26
  Thank you.
• 2:27
  Well, thank you for your question.
• 2:28
  What a great question to start off today.
• 2:31
  And I'm going to tell you right from the jump.
• 2:33
  In my view, there are two specific culprits that are going on here.
• 2:37
  One of them is inflation that's eating the rays on paper.
• 2:41
  And the listener kind of alluded to the other one, and that's lifestyle creep eating what's left.
• 2:48
  But as I said earlier, the best part of that is both of these are fixable.
• 2:52
  So we're going to walk through how to find out exactly where the money went on today's show.
• 2:57
  So here's the first thing I want to encourage you to do if you find yourself in this same situation.
• 3:02
  You've got to calculate your actual real raise, not the percentage on paper.
• 3:07
  It's really easy to say, well, I got a 10% raise, that's great.
• 3:13
  But wage growth this year has been running close to and at times behind the actual inflation rate.
• 3:19
  Say that word 10 times.
• 3:20
  It's a tough one to get out sometimes.
• 3:22
  It's a tough one to deal with, too.
• 3:24
  And so that race sounds solid on paper, but can end up being close to flat or even a real pay cut once inflation is factored in.
• 3:33
  So one of the things I would encourage you to do is compare your race percentage directly against this year's inflation rate to see your true real increase.
• 3:43
  This single calculation often explains most of the where did it go?
• 3:46
  Feeling right away, because in the end, a 5% raise during a year of similar inflation isn't really a race.
• 3:55
  It's just treading water.
• 3:57
  But then once you get past that, you say, well, Ralph, this is a real raise.
• 4:00
  When I look at my raised percentage and I look at inflation, I'm still ahead.
• 4:04
  Then you've got to track the specific categories that, that have gotten more expensive.
• 4:09
  These are the real things you're buying on a weekly basis, things like groceries and gas and those everyday essentials.
• 4:16
  The truth is, look around, those things have gotten more expensive this year for most people.
• 4:22
  One of the ways you can see that is if you pull a few months of bank statements and compare this year's essential spending against last year's.
• 4:29
  This is one of the tools I tell a lot of people to do.
• 4:32
  Go look at your bank statement from last August and look at your bank statement from this August and then you'll see exactly how much things are costing more.
• 4:41
  And then you can start to determine how much of the raise was already spoken for before the money ever became extra money.
• 4:48
  When you name that real cost.
• 4:51
  The increase removes the vague, uneasy feeling and replaces it with a clear number.
• 4:56
  Because in the end, your raise didn't disappear.
• 4:59
  A big piece of it went straight to the same bills, just at higher prices.
• 5:05
  Now, I want to get into something you mentioned in your question, and that's that creep, and that creep is called lifestyle creep.
• 5:11
  Because I want you to look for quiet lifestyle creeps separately from inflation after you've ruled out inflation.
• 5:18
  And listen, inflation is a real thing.
• 5:20
  Prices are going up.
• 5:22
  I want you to look for spending that increase simply because there was more room in the budget.
• 5:27
  All of us have been here, or maybe, maybe you haven't been here, but you'll get this situation sometimes and you notice that you're spending a little bit more on groceries.
• 5:37
  Maybe you get some upgrades, maybe you're ordering more takeout, it's easier.
• 5:42
  You know, it's, I had a rough day at work, so I'm just going to order takeout.
• 5:45
  Or maybe it's those subscriptions.
• 5:47
  Maybe you've added one or two of those and they don't feel like they're big things as you're doing them, but they add up quietly.
• 5:54
  Now, I'm not telling you to do this about guilt.
• 5:57
  I want you to see clearly what inflation and what actual new spending looks like.
• 6:03
  Because if we're going to be honest with each other, most people have both of these.
• 6:07
  And when you know that split, it changes what to actually fix.
• 6:12
  Because not every dollar disappeared to prices.
• 6:15
  Some of it disappeared to comfort.
• 6:17
  You didn't plan for.
• 6:19
  And then you mentioned in your question, you said, ralph, how do I make this better for the next time?
• 6:24
  It sounds like this raise has already come and gone.
• 6:27
  One of the best things you can do is give the next raise a job before it arrives.
• 6:32
  I'm in the midst of writing a book called the Dollar Job Framework.
• 6:36
  I'm a firm believer that you've got to give every single dollar a job or it'll find a job on its own.
• 6:43
  So if you've got a raise that's down the road, one of the best things you can do is decide in advance where the future raise will go.
• 6:50
  Plan ahead.
• 6:51
  Are you going to put more in savings?
• 6:54
  Are you going to be strategic in paying off debts?
• 6:57
  Is there a specific goal?
• 6:58
  Maybe you want to save for a home or a new car?
• 7:01
  Well, if you plan those things in advance before it hits the paycheck, you will do a better job with that.
• 7:06
  Because like I said a few minutes ago, money without an assignment tends to quietly Blend into everyday spending.
• 7:12
  You don't even realize it's going.
• 7:14
  One of the key ways you can do this, and I love this idea, is automate a portion of any future raise directly into savings or into extra debt payments.
• 7:24
  One of the things that a lot of people do is when they get a raise, they automatically increase their retirement contribution.
• 7:31
  It's a great thing to do.
• 7:33
  This single decision when you make it ahead of time is what actually makes a raise feel different.
• 7:39
  Because a raise without a job to do is a raise that quietly disappears.
• 7:43
  And raise your hand if you felt that quietly disappearing.
• 7:47
  Here's one of the things I want to make as a takeaway for today.
• 7:50
  You got to revisit this every time your income changes.
• 7:54
  This isn't some one time quick fix.
• 7:57
  If you're like most people, your income is going to increase over time.
• 8:01
  So you've got to build a habit.
• 8:02
  This is a habit that you've got to repeat every future raise or every time you get a bonus.
• 8:07
  We've already talked about bonuses today, but bonuses are fertile ground for this as well.
• 8:13
  Each time the income increases, run that same real calculation before deciding how to use it.
• 8:18
  Because you might run that calculation and realize, yeah, I got a raise at work, but Ralph, everything costs more, so I actually didn't get a raise at all.
• 8:27
  So I'm going to encourage you to build a pattern where income growth actually translates into visible progress over time.
• 8:34
  Because here's the thing I tell people every day, those small consistent decisions here compound, and they compound significantly over career.
• 8:43
  So do this once and you'll feel better this year.
• 8:45
  If you do it every time, you'll feel better for the rest of your career.
• 8:49
  And that's what we're really building, a long term success strategy.
• 8:54
  But I also feel something.
• 8:55
  Well, for you today, there's a real discouragement in working hard in earning something you're proud of and still feeling like nothing actually changed.
• 9:05
  And that confusion is honest.
• 9:06
  That confusion you felt today is honest.
• 9:09
  And it doesn't mean you did anything wrong.
• 9:12
  It means the money had no destination before it arrived.
• 9:15
  And here's what our faith promises us.
• 9:17
  It promises us that wisdom and intentionality.
• 9:20
  I love that word, intentionality.
• 9:21
  You hear it on the show all the time.
• 9:24
  But faith promises us that that use of wisdom and intentionality, applied even to ordinary things like a raise, are exactly the kind of faithful stewardship that God honors.
• 9:37
  Faith doesn't promise us that every raise will feel immediate relief.
• 9:41
  Sometimes the raises are just to keep up with what's going around us.
• 9:44
  And it doesn't promise us that prices are going to slow down to match your paycheck.
• 9:48
  I love what Proverbs 21:20 says, and we'll get to our Bible verse in a few minutes, but it says the wise have wealth and Lux, but fools spend whatever they get.
• 9:58
  Now, if you've spent money because you've had a raise, I'm not calling you a fool.
• 10:02
  I'm not saying this isn't foolishness.
• 10:05
  It's about giving the next increase real direction.
• 10:08
  It's living in that intentional stewardship.
• 10:11
  It's not about more income.
• 10:13
  It's usually what changes how a race feel.
• 10:16
  When you be intentional about your life with that, that small shift is available to you starting with the next very paycheck.
• 10:25
  And in the end, the raise wasn't wasted.
• 10:28
  It just needed a destination before it arrived.
• 10:31
  So right now, if you're feeling confused, that doesn't mean you did anything wrong.
• 10:35
  It means the money needed a plan.
• 10:37
  So understand the real numbers and replace that vague frustration with a clear next step.
• 10:43
  And then your next raise can actually feel different starting today.
• 10:47
  So here's your win for today.
• 10:48
  If you're in this same situation, I want you to calculate your real raise by comparing your percentage increase against this year's inflation.
• 10:56
  Right now, you might not be happy with the results, but it's the reality on the ground.
• 11:00
  And like I said earlier, pull a few months of statements and then take a look at what essential categories have gotten more expensive.
• 11:08
  Because once you know the real numbers, you'll get out of that fog and you replace that vague frustration with a clear picture of exactly where the money went.
• 11:16
  And when you know where your money's going, then.
• 11:18
  Then you can manage it better.
• 11:20
  Well, let's get to our Bible verse today.
• 11:21
  I've already read it, but we're going to read it again.
• 11:23
  It's Proverbs, chapter 21, verse 20.
• 11:27
  It says the.
• 11:28
  Well, the wise have wealth and luxury, but fools spend whatever they get.
• 11:33
  And hear me clearly, I'm not calling anybody a fool.
• 11:36
  But what I believe this verse points to is intentional direction of our resources, not simply having more of them, not simply getting more money.
• 11:46
  If you've got a raise without a plan, it tends to just blend into everyday spending.
• 11:49
  You don't even realize where the money went.
• 11:52
  But when you give your future income a specific job to do, that is using wisdom and practice.
• 11:59
  Well, let's pray together.
• 12:00
  And then I got a special announcement for you.
• 12:02
  Heavenly Father, I want to thank you for this listener's hard work.
• 12:06
  And the raise he earned this year.
• 12:08
  And I just asked, Lord that you would give him clarity as he traces exactly where this year's raise actually went.
• 12:15
  Replace that discouragement with clear, workable plans for future income changes, Lord, and help him to give every future real increase purpose and direction before it even arrives.
• 12:26
  Lord, I ask that you will provide for his family even as all of us are seeing prices continuing to rise around us.
• 12:33
  And Lord, bless His diligence in wanting to understand and steward this well, Lord, help us all to make better decisions with our money.
• 12:41
  And we ask this in Jesus name.
• 12:44
  Amen.
• 12:45
  Again, a raise can feel invisible when inflation quietly erodes it.
• 12:50
  Net lifestyle creep is not the kind of creep we want to have around.
• 12:53
  So calculate the real raise, track those real cost increases and give that next raise a specific job before it arrives.
• 13:01
  That's what actually makes future income feel different.
• 13:05
  And if you've got a question for the show, I would love to hear your voice.
• 13:08
  You can go to financiallyconfidentchristian.com/voicemail we'll put a link in the show notes, but again, that's financiallyconfidentchristian.com/voicemail now, I teased at the beginning, I've got a bit of an announcement to make.
• 13:23
  So before I go, I have something new to tell you about and this is pretty exciting.
• 13:27
  I'm pretty excited about this.
• 13:29
  Starting on Monday, August 31, this show is going to become a brand new show called Becoming Financially Confident.
• 13:37
  It's going to be live every single weekday, Monday through Friday at 11:30am Eastern.
• 13:42
  And here's the best part.
• 13:43
  It's going to be a full hour.
• 13:45
  Me and a co host, two voices.
• 13:47
  Not a lecture anymore.
• 13:48
  We're going to talk about real bills.
• 13:50
  We're going to talk about real numbers.
• 13:51
  We're not going to talk about jargon.
• 13:53
  We certainly aren't going to talk about shame.
• 13:55
  And here's the best part of the show.
• 13:57
  Live chat is going to be part of it.
• 13:59
  You get your questions answered right on the air.
• 14:02
  Now if you don't, if you're unable to catch it live, that's okay.
• 14:04
  The podcast isn't going anywhere.
• 14:06
  The live show is where we go deeper in real time.
• 14:09
  And if 11:30 doesn't work for you, don't, don't worry about it.
• 14:12
  Yes, we're going to go live at 11:30 Eastern, but then the whole show's going to get released as a podcast episode later that day.
• 14:19
  So you can be there with us live or you can catch it on your drive home again.
• 14:23
  It starts Monday, August 31st at 11:30am Eastern.
• 14:28
  And I would love to see you there.
• 14:29
  We'll have more information about that coming soon.
• 14:31
  So thank you so much for joining me today.
• 14:33
  I want to encourage you, as I always do, stay financially savvy.
• 14:38
  May God bless you.
• 14:39
  And you have a truly great day today.