How much lifestyle can I afford?

Eating ramen in a drafty apartment? That trend is canceled. You just got your first job or a big promotion, and you’ve got money dripping from your pockets.

Maybe you could buy a new car and still afford to Uber on the weekends. Or finally snag that sweet downtown apartment. Maybe you could even buy a house and eat your avocado toast too.

When the stacks start rolling in, we’re all tempted to upgrade our lives to something a little more gucci. But it’s worth hitting pause for a sec to deal with one of life’s biggest adulting challenges: figuring out how much lifestyle you can really afford.

You can’t foretell the future, but life does come with certain certainties. Like how stuff happens—and sometimes it’s expensive stuff. Like how savings can help you keep your financial cool in an emergency. And how investing now means you’ll build more wealth in your lifetime than if you wait 5 years.

So whenever your income takes a jump, it’s smart to find a balance between your must-haves right now and your must-haves in the future. Most experts recommend devoting at least 20 percent of your income to emergency savings, retirement, and your long-term goals.

1. Emergency fund

Laptops break down. iPhones get dropped. Medical stuff happens. These are all things that can ruin your day, month, or even year. Not having enough cash on hand to cope makes them even worse.

There’s one thing you’ll never, ever regret doing, and that’s stashing a bit of your extra income into an emergency savings fund. When you stumble in life, a healthy emergency fund can give you a way cushier landing. Start with at least two months’ worth of income to cover minor emergencies like a small car repair. Then aim for three months’ worth, which should be enough to cover something major like an emergency room visit.

2. Retirement

I know—it seems way far off. But the irony is that’s what makes now the perfect time to start saving for it. When you invest in a retirement plan with compound interest, your money snowballs over time. And the longer you save, the exponentially larger your stacks.

If you have a 401k at work, many employers will match your monthly retirement savings up to a certain amount. That’s basically free money that has nothing to do but grow over the next 10 years. So start contributing at least enough to max out your employer’s contribution. If you don’t have a retirement plan, you can open an IRA and start building wealth your way.

3. Long-term must-haves

Before you change the lifestyle you have now, think about the lifestyle you want in 5 years. Or 10. If that lifestyle requires any major purchases or loans between now and then, you’ll need at least enough for a down payment.

In some cities, it can take 10 years or more to save up enough for a 20 percent down payment on a house. How annoying would it be if you decided you were ready for a house but then had to wait years to save up? Start now, and you’ll be on it when the time comes.

Once you’ve gotten the future stuff nailed down, you can start looking at must-have lifestyle upgrades that fit your new budget. Whatever that is for you, make it gucci.