Got a Pay Rise? Here’s How to Use It Properly (and Avoid Regret)

This week on The Vault, we tackled a dilemma that perfectly captures why so many of us struggle to actually feel better off when our income goes up.

It’s the moment we all dream of: the pay rise finally lands. 🤑

But instead of celebrating, one listener wrote in to The Vault with a dilemma: 

“Is it lifestyle creep if I sell my car to buy a new electric one now that I’ve had a big pay rise?”

She explained that she only has £250 in her emergency fund… but her fuel costs are about to triple when she has to go into the office more often. So her thinking was: sell her current car (which is fully owned and holding its value), put some of the money into her emergency fund, and use the rest as a deposit on a new electric car.

Sounds smart… right?

Here’s why we said (lovingly) – don’t do it. 🙅‍♀️

The danger of spending a pay rise before you’ve caught up

It’s completely normal to want to treat yourself when your income increases. You’ve worked hard. You’re earning more. So why shouldn’t you upgrade your life?

But as we shared in this week’s episode, you can’t afford to increase your lifestyle if you haven’t caught up on the basics yet.

Our listener only had £250 in her emergency fund. That’s not a foundation, it’s a warning sign. ⚠️ And upgrading your car (especially one that’s already paid off!) just piles on unnecessary pressure and locks you into monthly payments. 

Even if it’s an electric car. Even if it saves on fuel. If you can’t buy it outright, you can’t afford it.

Your pay rise isn’t a permission slip – it’s an opportunity

It’s so easy to convince ourselves that certain purchases are practical or even noble (hello, electric car). But if you’re not in a strong financial position, even a sensible-sounding decision can hold you back. 

Here’s what we recommend instead:

• Pause the big purchases. The urges can be strong, but they’ll pass.
• Grow your emergency fund. If your pay rise means £300 more in your account each month, that could mean a solid buffer within just a few months.
• Future-you deserves options. Save. Invest. Plan for travel. Fund your maintenance pot. You can do so much more with that money if you don’t tie it up in a car. ✈️🏡💸 
• Get intentional with your habits. We’ve put together a list of daily, weekly, monthly and yearly money habits to help you take control of your finances and make your pay rise actually work for you.

There’s nothing wrong with a “banger”

In fact, you should name it. Celebrate it. Laura is still running a 12-year-old car into the ground – and loving it. ❤️ 

We also talked about the pressure that comes from comments like “When are you getting rid of your old car?” and how to stay grounded when friends are flashing their new keys with bows on them.

Because what really matters? Freedom. Flexibility. And making progress.

Catch the full episode now
If you’ve had a pay rise (or hope to soon), this episode is for you. Listen to The Vault with Financielle now on:
🎧 Spotify
🎧 Apple Podcasts 

And if you’ve ever fallen into lifestyle creep – or named your old car like a pet – we see you. 😘