New Year, New Paycheck! How to Evaluate Your Cash Flow After a Raise or Bonus
The start of the year is often full of forward momentum, especially for high-income professionals in law and consulting. If you're a Big Law associate or partner, there's a good chance your compensation just increased thanks to a new salary scale, a year-end bonus, or both.
It’s exciting, but without a plan, that extra income can vanish quickly. Lifestyle upgrades, unexpected expenses, or even funds just sitting in your checking account can make it feel like your paycheck evaporates. But the good news is that you don’t have to deprive yourself to use this money wisely: you just need to be intentional.
Here’s how to step back, reassess, and make the most of your new paycheck while motivation is high and the year is still fresh.
Step One: Acknowledge the Change
Many professionals anchor their lifestyle and savings habits to a previous income level. That’s especially true for lawyers, whose compensation tends to rise quickly but whose time and mental energy are often depleted.
But once your income changes, your strategy should change, too. Whether you received a $75k bonus or a $25k salary increase, you now have more flexibility and more opportunity. It's important to pause before that extra income gets absorbed into autopilot spending.
Step Two: Step Back and Look at the Big Picture
Start by reviewing where your money is currently going. Are you covering your core expenses comfortably, or have things felt tight? Have you been delaying savings goals or wondering if you’re falling behind?
Now is a great time to revisit your:
Fixed expenses. Can you maintain your current lifestyle while using some of your raise for future goals? If not, which upgrades are truly worth it?
Emergency fund. Do you have 3–6 months of expenses saved? If not, this may be your first stop.
Short-term goals. Planning for a wedding, home, or family in the next few years? Allocating funds now can reduce financial stress later.
Long-term goals. Are you on track with retirement, education savings (like 529 plans), or investing for future flexibility?
If you’re not sure where to start, a quick “cash flow check-up” with a financial advisor can help you clarify your priorities and put them into action.
Step Three: Automate, Automate, Automate
You’re doing the good work of re-evaluating your finances now, but willpower isn’t a long-term financial strategy. The best way to stay on track with your goals is by automating them.
Here are some of the best opportunities to automate contributions:
Increase your 401(k) or Roth IRA contributions
Max out an HSA if you’re eligible
Contribute monthly to a 529 plan, brokerage account, or even a high-yield savings account for future goals
Automate your bonus by directing it (or part of it) to a specific account before it hits checking
A few tweaks now can mean that by the end of the year, you’ve made real progress without needing to revisit the decision every month.
Step Four: Figure Out What You Really Want
Not every dollar needs to be “optimized.” It’s okay to celebrate, take a trip, or upgrade your lifestyle in meaningful ways. However, there’s a difference between conscious upgrades and unconscious drift.
One way to evaluate whether a certain item is meaningful or “accidental” is to ask yourself: If I look back in December, what would make me feel proud of how I used this raise or bonus?
What are some ways to use a bonus that would make you feel proud? It might be getting serious about a down payment. Or perhaps building a buffer to take time off or change firms. It could also be creating a cushion for caregiving, career changes, or simply reducing financial anxiety.
Whatever your goals, naming them is the first step toward making them real.
Step Five: Get Some Help if You Need It
If you're unsure how to adjust your plan, or you just want a second opinion, we’re here to help.
At Hark Financial Planning, we specialize in working with high-achieving professionals, especially law parters and self-employed lawyers. We’ll help you clarify your goals, understand your cash flow, and build a strategy that works with your life (not against it).
