Why You Shouldn’t Plan Your Bonus or Tax Refund
When creating a budget, you can include additional income earned in the form of a bonus or tax refund. The Motley Fool explains why you might not want to count on them.
When it comes to budgeting, it is helpful to plan your income conservatively and be careful. For this reason, you may not want to include the bonus or tax refund as income. The Motley Fool explains:
In particular, bonuses are not guaranteed in any way, and if your company has had a bad year or you have not achieved certain goals, you may not see this additional income this time.
Tax refunds can be tricky business too … But even if you have received significant refunds over the past few years, it can be difficult to know where it came from if you are really out of tune with your finances. For example, it may be that in the past you were eligible for certain tax breaks or deductions that no longer apply. This is why betting on a bonus or tax refund can really hurt you. If you rely on money that never falls into your hands, you risk overspending and running into debt.
On a more positive note, let’s say you don’t plan your bonus, but you still get it: even better, it becomes unexpected luck that you can use to achieve financial goals, debt, or other priorities. In other words, instead of relying on this extra money, you use it as a financial buffer .
For more budgeting tips, see the full publication at the link below.
5 Budget Changes You Need To Make This Year | Motley fool