Saturday, June 23, 2012

Higher Income Dampens Financial Discipline

With my new job in January came a 30% raise.  My base salary shot up over six figures for the first time, and if I'm diligent I will earn generous annual bonuses on top of that.  I am of course thrilled with this new development, and initially I went straight to work on my spreadsheets to figure out my new budget and set new financial goals.

The thing is that I was actually managing fine even before the raise.  I had been maxing out my retirement accounts for a few years, and though my savings fluctuated I always had a cushion in the bank.   My rentals had an awful year in 2011 but even so I managed to supplement that cash flow with my paycheck without sacrificing much in the way of other savings goals.

With my new income, reaching those same goals each year takes almost no focus or effort.  In fact without even trying and despite a lot of increased spending so far this year on travel and new work clothes, my savings account has been growing by leaps and bounds each month (which is helped by the fact that my rentals have been doing MUCH better this year).  And of course I'm still maxing out my retirement accounts.

Obviously I should set my sights higher, strive to save more, pay down debts faster, etc.  But the truth is that I don't really have any interest in doing that right now.  I did establish some automatic monthly charitable giving, but other than increasing my giving along with my income I am lacking any financial convictions.

It seems pointless, even selfish to expend energy forcing myself to save some arbitrarily higher amount, fretting about my balances, tracking and sorting each of the thousands of dollars that flow into and out of my bank account each month.  I used to relish all that figuring; tracking my finances made me feel in control.  But now I feel like my focus should be elsewhere - on my social life, on romance, on improving my physical condition, on spiritual matters.  Pretty much anywhere but on my personal finances.

So for now I'm going to let everything rest on auto-pilot.  I'm not going to buy a new house or make any other dramatic decisions.  I'm just going to not focus on finances for awhile.

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