Why Your Bonus Could Be a Great Opportunity to Prepare for the Unexpected | Global News Avenue

Several of my clients have been fired over the past two years. Industry like the technology industry are difficult for a variety of reasons, including Advances in AI and the decline in recruitment surges after the pandemic.

In an uncertain job market, it is important to make sure you have a financial buffer and plan in case you lose your job. Bonus – or unexpected gains like tax refunds – are a great opportunity to facilitate these efforts.

I’ll tell my clients

According to a recent Wall Street Journal report, the number of people in the U.S. who have been hunting for at least six months has increased by more than 50% since the second half of 2022. Workers who earn six figures have difficulty finding new jobs after being fired, while job searches take longer.

Suitable for customers Do To have their job and get a bonus, this extra income is a great opportunity to protect your finances from potential job losses. Here are some steps for customers to use the bonus in this preparation:

1. Increase your emergency fund

If the client works for a company that provides standards Severance packI recommend that they have at least twelve months of living expenses between them Emergency Fund and expected severance. Saving at least half of the bonus for the fund can help clients achieve this faster.

2. Manage debt

Bonus allow people to reduce or eliminate Debt obligations. If a client has high interest debt, such as a credit card or personal loan, I prioritize these paid-off debts and encourage them to avoid new debt commitments. These actions help clients manage their fixed expenses, which are difficult to adjust during times of limited revenue challenges.

3. Plan future expenses

Consider what new fees or purchases may arise next year. Customers often experience annual expenses (e.g. property tax or Insurance Payment) or large planned expenses (such as an anniversary trip). These can be funded through monthly savings or a one-time bonus proceeds.

That way, if something like unemployment occurs, the client already has a roadmap, so they don’t have to worry.

Bottom line

Rewards are undoubtedly an exciting achievement and income increase. While it may be tempting to wave something interesting, it is important to be prepared for an accident. By using bonuses to prepare for uncertain times, such as adding your contingency fund, managing debt and planning for future spending, you can rest assured that they know they have a financial buffer in the unpredictable job market.