Here's why getting a raise can actually hurt your retirement

Here's why getting a raise can actually hurt your retirement  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  VIEW IN BROWSER | SUBSCRIBE WED, JAN 29, 2020 YOUR WEALTH Editor's Note Riddle me this: How can getting a raise hurt your financial life? Answer: When you allow lifestyle creep to sneak into your world. The basic concept of lifestyle creep is that as your discretionary income goes up (you get a raise), your standard of living goes up with it. And we all know that living above our means is a recipe for financial disaster. Yet, we all need to be reminded from time to time. When you begin earning more, it's natural to want to treat yourself. So, it's easy to justify spending a little extra money. But this feeling of deserving more can escalate quickly and it prevents you from building an emergency fund or properly saving for your life goals and that includes retirement. To that point, research shows Americans typically don't change their savings rates after receiving a raise. I get it. After years of sacrificing and eating ramen noodles for dinner a few times a week, getting a raise or a bonus can feel like you truly hit the lottery. With lifestyle creep, discretionary spending becomes perceived as a necessity versus a want. It's very tempting to spend more money now that your paychecks are fatter. It's also important not to squander your new gains on short-sighted purchases. Don't blow all of your hard-earned cash and end up in debt. Remain focused, stay within your budget, live within your means and keep that lifestyle creep in check. For more cool stuff like this, please follow me on Twitter @jimpavia and check out CNBC's Financial Advisor Hub and CNBC + Acorns Invest in You: Ready. Set. Grow. Jim Pavia @JIMPAVIA Here's why getting a raise can actually hurt your retirement Americans who get a pay increase need to change their savings behavior to maintain their standard of living in retirement. Tax season is here! What you need to make it easy Dust off your calculator and sharpen your pencils: Jan. 27 is the first day of tax season. Here's what you should do to make the process as speedy and pain-free as possible. The stock market suddenly seems nervous. What this means for you, depending on your age Here's what a big drop in the stock market means for you, depending on your age. Here's how to financially prepare your family for the worst-case scenario You've been building up your emergency fund, painstakingly paying off debt and even putting away a few dollars for your child's education. The next step is to protect it all with life insurance. Where to get started. Here's when your tax return could spark interest from the IRS Some aspects of tax returns generate more scrutiny than others, and IRS computers are adept at weeding those out. The secret to financial success: Paying off debt U.S. households with credit card debt owe nearly $7,000, on average. If you made the minimum payments on that balance, it would take 21 years to pay it off. Here's how to pay down debt far more effectively. Here's how to make the most of the tax break for medical expenses — if you can get it While there are a few hurdles you need to clear to use the tax break for medical expenses, anyone with high health care costs may want to see if it's available to them. Thousands of dollars could be draining out of your account when you make these common investing mistakes From fees and when to invest to the best way to invest in a target-date fund, people make a lot of mistakes when it comes to investing. Expensive mistakes. Incumbency "Won't there be a next next thing at some point that comes along and does to the ETF what ETFs had done to mutual funds? ... And how does a $4.3 trillion industry handle its incumbency?" CONTRIBUTORS Sharon Epperson @sharon_epperson Josh Brown @ReformedBroker Unsubscribe Manage Newsletters Terms of Service Join the CNBC Panel   Digital Products Feedback Privacy Policy CNBC Events   © 2020 CNBC LLC. All rights reserved. A property of NBCUniversal. 900 Sylvan Avenue, Englewood Cliffs, NJ 07632 Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis. Data also provided by THOMSON REUTERS