A salary bump can feel like a well-earned reward — and a golden opportunity to revisit your financial habits. One area worth reconsidering? Your dollar-cost averaging (DCA) strategy.
This article explores how you might adjust your regular investment contributions after a raise, with the aim of helping you stay aligned with your financial goals while maintaining autonomy over your decisions.
A quick refresher: what is dollar-cost averaging?
Dollar-cost averaging (DCA) is an investing strategy that involves investing a fixed amount of money at regular intervals — regardless of market conditions. It’s a disciplined, long-term approach that removes the emotion from investing and can help smooth out the impact of market volatility over time.
By investing consistently, you buy more units when prices are low and fewer when prices are high, potentially reducing your average cost per unit in the long run.
Learn more in our deep dive on dollar-cost averaging (DCA) .
Why a salary increase can be a good time to review
A salary increase gives you the chance to check in with your financial priorities. It’s not just about having more money — it’s about what you want that money to do for you.
Without intention, it’s easy for new income to be absorbed by lifestyle inflation — those subtle upgrades in spending that often accompany a bigger paycheque. Reassessing your DCA contributions after a raise can be one way to stay on track toward your long-term investing goals.
Questions to ask before adjusting your contributions
Before making changes, it’s worth pausing to reflect on your overall financial picture. Some helpful prompts include:
- Have my expenses changed? Have you taken on new costs or paid off debts?
- Have my financial goals shifted? Are you planning for a house, travel, or early retirement?
- Do I have high-interest debt ? If so, directing extra income toward paying it off could reduce financial pressure.
- Is my emergency fund solid? Many aim for 3–6 months’ worth of living expenses — has your emergency fund kept pace?
- Am I using other financial tools? Consider whether you’re contributing to your superannuation, an offset account, or other savings vehicles.
This kind of self-inventory can help you decide whether an increase to your investment contributions is the right move — and if so, by how much.
Approaches to increasing DCA contributions
As with so many concepts in investing, there’s no one-size-fits-all formula for DCA increases. With that said, here are some frameworks you could consider:
- Stick to a percentage. If you’ve been investing, say, 20% of your income, a raise means that 20% will now be a larger dollar amount.
- Invest the entire raise. If your current lifestyle feels sustainable, you might decide to direct 100% of the raise into investments.
- Split the difference. You could allocate part of the raise to spending (e.g. dining out or travel), part to savings, and part to investing.
- Rebalance based on new goals. A raise might also prompt a reshuffling of priorities — perhaps you want to ramp up your home deposit fund or start investing for your children.
What matters most is finding an approach that supports your goals, and is easy to stick with over time.
Automation and behavioural nudges
Once you’ve made a decision, automating it can make it easier to stay the course. Tools like Automate let you schedule regular investments, helping you stay consistent even when life gets busy.
Even a small increase — say, an extra $25 a fortnight — can compound meaningfully over time. Behavioural nudges like automation help turn good intentions into sustained habits.
Hypothetical examples
While everyone’s situation is unique, here are a couple of fictional scenarios that might help you think through your own:
- Mingna, 25, no debt, steady job: After a 10% raise, Mingna decides to increase her DCA contributions by the same 10%. Her expenses haven’t changed, and she’s focused on growing her long-term investment portfolio.
- Jess, 40, mortgage and kids: Jess receives a bonus and small raise. She opts to split it — putting some toward the mortgage offset account, some into her kids’ education savings, and a portion into DCA contributions. She also sets a calendar reminder to review things again in 6 months.
- Ray, 33, recently cleared credit card debt: With his debt gone and a new salary tier, Ray increases his emergency fund contributions for a few months before adjusting his DCA strategy. He uses this as a “recovery” phase before locking in higher investment amounts.
None of these paths are better than the others — they’re just different ways of using a salary bump as a springboard for progress.
Final thought: there’s no “correct” move
Reviewing your DCA contributions after a raise is a smart habit, even if you ultimately decide to keep things as they are. It signals that you’re engaging with your finances intentionally — and that’s a win in itself.
Rather than chasing perfection, aim for consistency, clarity, and alignment with your evolving goals.
