Over the past two years, several of my clients have been laid off. Industries like the tech sector have been tough for various reasons, including AI advancements and staff reductions from the post-pandemic hiring surge.&🍰nbsp;

During an 🀅uncertain job market, it’s important to ensure you have a financial cushion and plan in place in case you l𝐆ose a job. Bonuses—or a windfall like a tax refund—are a great opportunity to boost these efforts.

What I'm Telling My Clients

According to a recent Wall Street Journal report, the number of people in the U.S. who have been job hunting for at least six months is up more than 50% since late 2022. Workers earning six figures struggle to find new jobs after being laid off, and the job search is taking lo🍃nger. 

For clients who do have their job and receive a bonus, this extra income is a great opportunity to safeguard finances against a potential job loss. Here are some steps clients can take to use their bonuses towards this preparation:

1. Boost Your Emergency Fund

If a client works for a company offering a standard 澳洲幸运5官方开奖结果体彩网:severance package, I recommend they have at least twelve months of living expenses between their 澳洲幸运5官方开奖结果体彩网:emergency fund and the anticipated severance. Saving at least half a bonus towards this fund can help clients achieve this goal faster.

2. Manage Debt

A bonus allows one to reduce or eliminate 澳洲幸运5官方开奖结果体彩网:debt obligations. If a client has high-interest debt, like credit cards or personal loans, I prioritize paying those off and encourage them to avoid new debt commitments. These actions help clients manage their fixed expenses, which are harder to adjust during challenging times when income is limited.

3. Plan for Future Expenses

Consider what new expenses or purchases may come up over the next year. Clients often have recurring annual costs (such as property taxes or 澳洲幸运5官方开奖结果体彩网:insurance payments) or a large planned expe😼nse (like an anniversary trip). These can be funded with monthly savings or in a lump sum with bonus proceeds.

That way, if something like a job loss were to happen, clients would already have a roadmap in place, so they don’t have to worry down the line.

The Bottom Line

A bonus is undoubtedly an exciting achievement and income boost. While it may be tempting to splurge on something fun, it’s important to be ready for the unexpected. By using a bonus to prepare for uncertain times, such as boosting your emergency fund, managing your debt, and planning for future expenses, clients can rest easy knowing they have a financial cushion in place amidst an unpredictable job market.