How Do I Budget for Homes and Cars When 40% of My Income Is a Bonus?
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Published 2024-07-11
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All Comments (5)
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Thanks guys, been saying this and people that don’t have significant bonuses structures disagree or don’t understand. Bonus is income and should be considered in both saving AND spending. Just gotta budget it differently than a biweekly check. Mines quarterly so I just invest 25% of the pre-tax amount. With the remaining amount after taxes and investments, divide by 3 months and that’s how I spend the money as once that runs out I’ve received my next quarterly bonus. Agree with Bo. Taxes taxes taxes! My bonuses get taxed around 29.5% idky that exact percentage but every 1000 is roughly 700 post tax
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I would think it would depend on how consistent that bonus is. If it's highly variable, I would keep cars and houses to a cost you can afford on your base income, then budget the bonus you get once you get it. Invest the amount you need to meet your goals, then divide that amount by 12 and add that amount to your monthly budget to last until your next bonus
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Use a reverse budget. The 60% should be completely dedicated to strictly necessities and savings. And this has to be actual necessities like utilities, transportation, food, other government fees, medical fees, and maybe day care. Then comes the left over budget for a house (or rent), and/or auto loan.
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That's a lot of jelly of the month clubs. But you never count you bonus.
