He received 12% salary hike, but felt poor 3 months later. CA shares what went wrong with his client's financial planning
A salary hike can paradoxically lead to feeling poorer due to small, permanent lifestyle upgrades that erode financial flexibility. These seemingly harmless increases in fixed costs, like rent or savings, can collectively erase a monthly surplus,...
By ET Online | Updated:
CA Abhishek Walia shared an eye-opening story from his clients who received a 12% salary hike but felt poorer just three months later. (Istock- Representative image)
Getting a salary hike is supposed to feel like freedom—a chance to enjoy life a little more, save a little faster, or finally upgrade your lifestyle. But what if the opposite happens? Some people notice their bank balance shrinking, even after a decent raise. The problem isn’t necessarily spending recklessly; it’s the quiet, almost invisible way small, permanent upgrades chip away at your financial flexibility, leaving you feeling poorer despite earning more.
CA Abhishek Walia, founder of Zactor Money, shared an eye-opening story from his clients. One client received a 12% salary hike but felt poorer just three months later. The city was the same, daily routines unchanged, yet his monthly surplus had vanished. When Walia analysed the situation, he found the issue wasn’t overspending—it was assumptions.
The raise had quietly funded several small lifestyle upgrades: slightly higher rent, marginally larger SIPs, and a few “harmless” indulgences. None of these felt excessive or reckless on their own, but together they slowly erased financial flexibility. The lesson Walia points out is simple: small, permanent increases in fixed costs hurt more than big, one-time splurges.
CA Abhishek Walia, founder of Zactor Money, shared an eye-opening story from his clients. One client received a 12% salary hike but felt poorer just three months later. The city was the same, daily routines unchanged, yet his monthly surplus had vanished. When Walia analysed the situation, he found the issue wasn’t overspending—it was assumptions.
The raise had quietly funded several small lifestyle upgrades: slightly higher rent, marginally larger SIPs, and a few “harmless” indulgences. None of these felt excessive or reckless on their own, but together they slowly erased financial flexibility. The lesson Walia points out is simple: small, permanent increases in fixed costs hurt more than big, one-time splurges.
He explains that in business, founders avoid raising fixed costs until revenue proves itself. Yet personally, many people increase their expenses as soon as income ticks up, assuming the extra cash provides room for upgrades. This mindset is what silently tightens the grip on financial freedom.
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According to Walia, these small adjustments don’t appear as mistakes—they manifest as pressure. Month after month, the mental stress grows, even when the bank account seems healthy at first glance. The danger lies in the invisibility of these changes: they slowly chip away at the freedom that a raise is supposed to provide.For young professionals and anyone enjoying incremental pay rises, Walia’s insight is crucial. Instead of automatically upgrading lifestyle expenses, it’s worth pausing to ask: does this choice improve my freedom, or is it quietly eroding it? Awareness of these subtle shifts can help ensure that every raise truly strengthens financial flexibility, rather than masking hidden costs that can feel like financial strain later.
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