New Job: How to Avoid Buyer's Remorse
My friend bought a $75K BMW to celebrate his $210K law job offer. Then the offer was rescinded. Here's how to avoid celebrating too soon.
Read time: 4 minutes
Celebrate after you cross the finish line.
Remember those viral videos where someone celebrates the WIN too soon?
Embarrassing?
I mean, c’mon.
He didn’t know any better because if he did…
…he would have come in first place.
This is the #1 thing that I try to avoid when making my financial decisions.
Avoid celebrating too soon.
The $75,000 Mistake
One of my friends graduated from law school last year.
Exciting times.
Especially since his offer was $210k+. 🤩
To celebrate?
Bought a $75,000 BMW.
He earned it.
Only thing was…
…his offer was rescinded. 😵
He went from celebration to panic.
Month after month…
…draining his savings.
In the moment it felt like buying the car was the right thing to do.
But it’s not THAT different than the runner celebrating too soon.
What Should I Do When I Receive an Offer?
Make a budget.
You don’t even have to be super complex.
How much do you make vs. how much do you spend.
Take an honest look and compare the two.
You’ll be surprised how many people can go MONTHS before taking 5 minutes to see where they are at.
My personal approach isn’t fancy.
I follow the 50-30-20 budgeting method.
I’ve basically automated it at this point.
Related: How to Make a Budget
What Should I Do When I Receive a Raise or Bonus?
First, wait until it’s actually in the bank.
Second, determine how much you want to enjoy!
After working so hard, it’s good to have some fun. 🎉
I typically keep my process simple for a bonus:
- 50% spent guilt-free
- 50% savings or investments
I try my hardest to avoid lifestyle expense creep.
What is Lifestyle Expense Creep?
Lifestyle expense creep refers to the phenomenon where discretionary consumption increases on non-essential items as the standard of living improves. With lifestyle creep, luxury goods and discretionary spending become perceived as a right to have and not a choice—as a necessity versus a want.
— Investopedia
This is the silent killer of financial progress.
You get a raise → You upgrade your car.
You get a bonus → You upgrade your apartment.
Before you know it, you’re making more money but saving the same (or less).
So What Happened to My Friend?
Unlike most other purchases,
Returning a car is a little more difficult.
He focused on finding another position at another firm…
…and was able to a few months later.
He was lucky. 🍀
But holding off that car purchase just a little longer could have avoided the situation altogether.
The Rule
Don’t spend money you don’t have yet.
- Wait for the offer to be official
- Wait for the money to hit your account
- Wait for the raise to show up on your paycheck
Then celebrate.
Cross the finish line first.
Related Resources
This article is for educational purposes and not financial advice. Please consider consulting with a licensed professional before making any financial decisions.
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