Here’s something you should definitely not count on in budgeting

When making your budget it is often easy to factor in different sources of income that may not be necessarily guaranteed. This can cause you to fall short when the bills come in. Budgeting is very difficult especially when you have an investment portfolio. Planning your estate is a key part to this. Call RD Smith for estate planning assistance.

Though year-end bonuses are by no means a given, they’re becoming a
more popular practice across a wide range of industries. According to
Challenger, Gray & Christmas, a Chicago-based global outplacement
company, almost 80% of employers give out annual bonuses, and while most
aren’t the epic payouts you hear about coming out of Wall Street, they
give their lucky recipients a reason to celebrate nonetheless. Still,
while getting a bonus is certainly a good thing, there’s a danger in
relying on that bonus year after year.

Don’t count your bonus in your budget

There’s a reason they call that year-end payout a bonus
much of the time, it’s by no means guaranteed. Though some bonuses are
based on individual performance, many are based on company success (if
your company does well, you do well). There’s also a third category of
bonus that’s a hybrid of both. While the individual performance model
conceivably gives you the greatest control over your financial fate,
most bonuses are precarious by nature.

Take the individual performance bonus. You might think
you’re doing a great job, and you may even have some data to back up
that claim. But if another employee outperforms you, you may not get the
number you’re hoping for. Bonuses that are based heavily on company
performance are even more tenuous. All it takes is one bad year or a
better competing product on the market to make your bonus go from
sizable to virtually non-existent. This is why it’s always best to
regard your bonus as extra money you weren’t counting on in the
first place. What this also means is that you shouldn’t factor your
bonus into your monthly budget, but rather plan your expenses based on
your salary alone.

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