Got a Raise = Smaller Paycheck

[kudy]

I try not to brag much, but that's what this section of the forum is for right?

I got a nice raise last month. I immediately increased my 401k deferral by 5% (almost to the max now), and factoring in my increased income and my projected freelance income for this year, I also increased my federal income tax withholding.

The net result was my paychecks shrunk by about ~$50. I am sure most people would freak out if their check shrunk after getting a raise, but I just feel more badass :)

[MDM]

Is the increased withholding needed to cover increased freelance income?  Otherwise, if your 401k contribution increase equals your pay increase, withholding could stay the same.  You'd be more badass and not need to take a $50/paycheck cut.

Of course, increased freelance is badass all on its own - well done!

[kudy]

Yes, the increased withholding is to cover increased freelance income.

[KungfuRabbit]

Good work!!

Raise = more saving NOT more spending.