The Raise That Disappears

The mail arrives on a Thursday evening in June. The subject line says “Compensation revision: strictly confidential,” and Rohan reads it standing in the office pantry, a paper cup of machine coffee going cold in his other hand. He reads it twice. Then he walks to the washroom and reads it a third time, alone, because he doesn't trust what his face is doing.

It is his first appraisal, and it is a good one. His manager had already hinted at it in their one-on-one that week: “You've done well this year, Rohan. The client noticed.” Now the letter puts a new CTC in front of him, and the jump is real. Not the token hike his seniors grumble about over lunch, but a proper one, the kind that makes a 24-year-old feel that somebody up there has seen the late nights.

He calls home from the parking lot. His mother says a small prayer of thanks before she says anything else. His father asks how much, listens, goes quiet for a second, and then says the one sentence fathers save for such moments: “Achha hai. Ab thoda bachana bhi.” Rohan says “Haan Papa,” in the exact tone in which every son in India has ever said “Haan Papa.”

That night, in the crowded Wakad flat with the moody geyser, he lies awake doing something new: spending the raise in his head. A flat without three roommates. A bike, so no more waiting for a Rapido in the rain. Saturday dinners somewhere with cloth napkins. Before he falls asleep, every rupee of the raise already has somewhere to go, and not one of those places is called “later.”

Now jump four months ahead. Rohan's salary is clearly bigger than it was. He has the flat, the bike and the Saturday dinners. And on the 25th of the month, he is back to the little ritual from Chapter 1: open the banking app, wince, close it, and check once more before ordering chai.

That is the puzzle of this chapter. Why does a bigger salary so often end up feeling exactly as tight as the smaller one? Nobody here is careless, and there is nothing wrong with enjoying a raise you worked for. But a raise has a habit of vanishing without anyone ever deciding where it should go. We will follow Rohan's raise and Shalini's DA to see where they went, and finish with one decision, made on one particular day, that changes the story. As always, there are no sums for you to do. The calculators count; you decide.

The first salary at the new rate came in July. It was bigger, but not as much bigger as the letter had made him feel. When CTC goes up, so do the slices taken out before the salary reaches you: PF grows with basic pay, and income tax takes a bigger bite as income climbs. In Chapter 1, Rohan blamed HR. This time he knew why, and still felt slightly cheated.

Then the flat. Akash, the colleague whose car took everyone to Lonavala that weekend, was also tired of sharing one bathroom with three people. Together they found a two-bedroom flat in a newer society on the other side of Wakad: a lift that works, a gym on the ground floor, a guard who salutes, and a balcony that looks straight at other people's balconies. Rohan's share of the rent was noticeably higher than before. Then came the deposit, the broker's fee, the packers, curtains, a second-hand sofa and a water purifier. The first raised salary went almost entirely into moving. “Worth it,” he told himself. “No more fighting over the geyser.”

A few weeks later, the bike. The daily Rapido had always felt like money thrown away, so a bike would “pay for itself.” Chapter 3 tells how easy the finance desk made it. What matters here is the feeling behind it, the one Rohan said out loud to Akash: “After a year of hard work, I've earned this.” Partly, he was right. The Rapido rides did stop. But the bike arrived with friends of its own: petrol every week, insurance every year, a helmet, a parking sticker from the society, and a service bill that was somehow always more than the service centre had said on the phone.

Then the small upgrades, which never felt like decisions at all. The cold coffee moved from the stall outside the office to a café where people bring laptops. Saturday momos became Saturday dinner at a rooftop place in Baner. A food-delivery membership, because it “pays for itself in three orders.” Two more streaming apps, because Akash had brought a big TV and it seemed a waste otherwise. Shoes from the brand showroom instead of the end-of-season sale. And the old gym, the one he had paid three months for at the start of his first job: he renewed it, although the new society had a gym downstairs, because “the trainer there is better.”

Look at that list. Rohan didn't start buying a new kind of life. He bought the same life with everything moved a step up the menu. Coffee was still coffee, and dinner was still dinner. Each step cost only “a little more,” and a little more never sounds like a decision.

A raise rarely buys a new life. Mostly it buys the same life one floor up, and the rent for that floor is due every month.

None of it felt like overspending. Apart from the bike, nothing was a big purchase, and the bike had a good reason. That is exactly why the empty 25th made no sense to him. He had not gone mad with money. He had simply said yes to a lot of reasonable things.

In Lucknow, Shalini's raises arrive in a different costume. There is no mail, no manager and no rating. Once a year her basic pay moves one step up the pay scale, and twice a year the dearness allowance is revised. Each time, the family WhatsApp group behaves as if she has won something. Chapter 3 mentioned the cousin with the row of party emojis. He is very reliable.

But read what the government itself says about DA. When the Union Cabinet approved the latest instalment on 28 October 2026, taking it from 60% to 63% of basic pay, the official release described the increase as being “to compensate against price rise.” In everyday words, DA exists so that a salary can keep up with prices. When milk, school fees and the gas cylinder all cost more, DA is the salary running just to stay where it was. It feels like a raise. Its real job is to stop the old salary from shrinking.¹

Over fifteen years of service, every step up has quietly moved Shalini's household one level up too. Two years ago, after an increment, Kabir moved to a “better” school with smart classes and higher fees, and then, naturally, to coaching as well. One scorching May they put a split AC in the bedroom, and now every summer brings its own electricity bill. When her mother-in-law's knees got worse, the part-time cook became a full-day one. Groceries moved from the Sunday mandi to an app that delivers in ten minutes. Sweets for guests now come from the famous shop in Hazratganj, not the corner one. None of it was showing off. Most of it made the family's life genuinely better.

And yet. Her salary today is far bigger than the one she started with, and the month feels about as tight as it did then. Under all of it sits the home-loan EMI from Chapter 3, first in line every month. Her mother-in-law summed it up one evening while shelling peas: “Jitni tankhwah badhti hai, utna hi kam padta hai.” The more the salary grows, the more it falls short.

Neither of them was careless, so where did the money go? Mostly into a handful of very ordinary habits of the mind. Once you can see them, you will start spotting them in your own month.

The thrill fades; the bill doesn't. For the first week in the new flat, Rohan drank his morning chai on the balcony and posted a photo of the sunset. By the fifth week, the balcony was where the clothes dried. The bike felt like freedom for about a month; after that it was simply how he got to office. We get used to good things astonishingly fast. The cost, though, keeps arriving on the same date every month, long after the joy has worn off.

Upgrades only climb. Think of the jack at a puncture shop: it clicks up easily, one notch at a time, and it never comes down on its own. Someone has to release it on purpose. Lifestyle works the same way. Moving to a bigger flat feels like progress. Moving back to a smaller one feels like announcing to the whole family that something went wrong. So costs climb a notch with every raise, and almost never come back down.

The ruler moves. A year ago, a ₹300 dinner was a treat for Rohan. Now a ₹1,200 one is “just a normal Saturday.” Our sense of what is normal comes far more from last month's habits than from our salary. Every raise quietly moves the ruler, and the old treat starts to look like a sacrifice.

New flat, new neighbours. In Rohan's old building, everyone parked bikes. In the new society, the parking is full of cars. At work, the seniors he now has lunch with talk about Bali, not Lonavala. The people we quietly compare ourselves with move up along with our salary, so the feeling of being “just about average” never goes away. A later chapter is about that audience, and what we spend for it.

“I deserve it.” A raise feels like a verdict: the company has officially said you are worth more. Spending it feels like accepting the compliment; saving it can feel like refusing a gift. Rohan really had worked hard, so the feeling was fair. It just came with no limit attached, so it covered the bike, then the rooftop dinners, then the third streaming app.

Spending next year's raise this year. Once you have had one raise, you start counting on the next. “Next appraisal will cover it” is a very comfortable sentence, and the bike EMI was signed with that sentence playing somewhere in the background. But next year's raise isn't in the bank yet. It might be smaller, or late, or it might not come at all if the company has a bad year.

Prices climb too. Even if you change nothing at all, the same life costs more each year. The rent agreement has a yearly increase written into it. The cook asks for a little more after Diwali. School fees go up every April. For its own employees, the government admits this openly through DA. In a private job nobody announces it, but part of your raise is already spoken for by prices before you have spent a single rupee of it.

For the curious: researchers call the getting-used-to-it part “hedonic adaptation,” and the endless loop of earning more, upgrading and feeling the same is often called the “hedonic treadmill.” In everyday money talk, the whole pattern goes by “lifestyle inflation” or “lifestyle creep.” You don't need the names. You only need to notice the next notch before it clicks.

Every raise asks a quiet question: a bigger life, or a safer one? If you don't answer it, the month answers for you.

This drift isn't only personal. The government's Household Consumption Expenditure Survey tracks what Indian households spend their money on, and its 2023-24 fact sheet sets those shares beside the ones from 2011-12. In urban India, the slice of spending that goes on drinks, snacks, processed food and meals bought ready-cooked grew from about 9% to about 11%. The slice for cereals, the rice and atta at the heart of every kitchen, shrank from over 6% to under 4%. Getting around, which covers bus and auto fares, fuel and the like, grew from about 6.5% to about 8.5%. Rural India moved in the same direction.²

A lot of this is good news. A country with more money buys more convenience, and fewer families live on bare essentials alone. The survey doesn't say why each household's basket changed, and this book won't pretend to know. But anyone who has had a raise will recognise the direction. When there is a little more, we buy a little more ease, a little more taste and a little less waiting. Rohan's café and Shalini's ten-minute grocery app are two tiny dots in a very big picture.

The difference is speed. A country's basket takes more than a decade to shift a few points. One person's basket can shift in a single appraisal season, the way Rohan's did between June and October.

On the last Sunday of October, during the ten-minute weekly look from Chapter 1, Rohan tried something different. Instead of asking what had surprised him that week, he made a list of everything that cost him more now than it had a year ago. He called it the rise list.

The rent share. The bike's EMI, petrol and insurance. The café. The Saturday rooftop. The delivery membership. Two streaming apps he had forgotten about. The old gym. The cabs on days the bike was at the service centre. Nothing on the list was shocking. Every line was something he had chosen, and most of them he would happily choose again.

Then he let the budget planner total up the rise list, put that figure next to his raise, and sat back. The two were almost the same. The raise hadn't leaked away through some hole. It had been turned, line by line, into a monthly life that was a bit nicer and exactly as tight.

There was one line he had missed, and it was the one that stung. His small automatic transfer to the future bucket from Chapter 1 was exactly the same size as before the raise. Everything in his life had gone up a notch except the one thing that had nobody fighting for it.

This is not a story about a foolish young man. The flat gave him quiet, and the bike gave him his mornings back. The trouble was that nobody, Rohan included, ever sat down and decided how the raise would be shared between today and later. So it got shared by default, one “only a little more” at a time, and a default always votes for today.

You can't always undo the last raise, and you may not want to. What you can decide is what the next one does. Here are three habits, small enough to survive appraisal week, a new flat and a friend asking “treat kab de raha hai?”

Habit one: split it on the day the letter comes. Before the first raised salary arrives, decide in one sentence how the raise will be shared: this part for life now, this part for later. The split doesn't need to be clever. Half and half is popular simply because it is easy to remember. What matters is the timing. On the day of the letter, you haven't got used to the new salary yet, and money you have never spent is the easiest money in the world to set aside. Write the sentence down somewhere you will see it on salary day.

Habit two: move the future part first, in the very first month. Chapter 1's habit was to pay the future first on salary day, with an automatic transfer. When a raise lands, increase that transfer in the same month, before your first café visit at the new salary. If you wait even two or three months, the bigger salary becomes your new normal, and raising the transfer will feel like taking a pay cut. In the first month it feels like nothing at all, because your life hasn't grown into the money yet.

Habit three: one upgrade per raise, chosen and enjoyed. From the life part, pick the one upgrade that matters most to you this year, the flat or the bike but not both in the same season, and enjoy it fully, without guilt. Let the other upgrades wait for the next raise; most of them will look less urgent by then. Before any upgrade that comes with a monthly cost, ask one question: “If this raise hadn't come, could I still carry this?” If the honest answer is no, let it wait.

This is also the right moment to raise the no-guilt fun amount from Chapter 1 a little. A raise you are not allowed to enjoy at all won't stay saved for long, and the plan will crack along with it.

Rohan couldn't take back the flat, and didn't want to. But that same Sunday he raised his automatic transfer, cancelled the two forgotten streaming apps and let the old gym membership run out. Nothing dramatic. Then he wrote a sticky note and put it on the edge of his laptop screen: “Next raise: half for me, half for later. Decide on the day.” The note is still there, slightly curled, waiting for next June.

Shalini's version lives in the Sunday notebook she keeps with Anil. A page in it now begins with two new lines. The first says that whatever the DA adds goes to the household, because prices have gone up and that is exactly what DA is for. The second says that the yearly increment gets split: some for the house, some for the line marked “Kabir: college.” It is not a dramatic plan. But for the first time in fifteen years, a raise feels as if it went where she sent it.

A raise is the easiest money you will ever save, but only for a few weeks, before it starts to feel normal. If you have one coming, or have just had one, here are the steps.

Step 3 needs a pen. Write your split sentence now, before the money arrives: how much of the raise goes to life, how much to later, and the date on which you will change your automatic transfer. If your raise has already landed, write it anyway, and change the transfer before your next salary day.

Next, in Chapter 3: it is Diwali night, and Rohan is standing in a showroom. One EMI is about to end, and the salesman is already smiling, because a new one is ready and waiting. Meanwhile in Lucknow, Shalini's home-loan EMI is still first in line every month. Why does an ending EMI feel like an invitation to begin another, and when does a loan stop being a tool and start owning the salary?

This chapter is for education only. It is not investment, tax or legal advice, and it does not recommend any product, fund, scheme or stock. Salary structures, DA rates and tax rules change, and every person's situation is different, so for decisions about your own money, check the latest rules or speak to a qualified adviser. The facts above come from the government sources linked beside them. Rohan, Shalini and their families are made-up characters, though their raises may look familiar.