Navigating a No-Bonus Terrain
Six tips to keep your finances on track when the bonus you usually look forward to won’t be coming this year.


Many people in the workforce are experiencing pay cuts during the current downturn. I’ve heard from some clients who aren’t expecting a bonus check this year and possibly no salary increase or bonus next year. Normally, when possible, I try to encourage them to live on their salary and to keep the bonus as the gravy in their plan to help save for their financial future. However, for people in sales positions who generate the bulk of their pay from commissions, that’s not a possibility.
For those experiencing a pay cut or loss of bonus during the pandemic, the financial goal is to weather the storm until it’s over and come out as unscathed as possible. To that end, here are six tips to help you navigate this new climate to minimize any damage to your long-term wealth:
First, Evaluate Your Monthly Budget
Many of my clients set aside funds for travel this year that will no longer be spent. The trips they planned will be wrapped into next year’s budget, since they only have so much time off. Others are spending less on entertainment, dining out, transportation and even clothes and other personal expenses, such as haircuts. As a result, the typical household may be able to save several thousand dollars this year that can be used to pay for essential expenses.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
One of my clients whose salary was cut in half temporarily made a game to see if he can keep his spending within the new salary, even though he had other means to maintain his lifestyle. He told me he was able to accomplish this since he was not eating out as much with friends nor traveling. He said that he plans to eat out even more than normal once his salary comes back … which brings me to my next tip.
Delay Some Spending, If Possible
Hold off on non-essential spending until your income is restored. I have some clients who planned on doing home renovations this year but are now waiting until their salaries and bonuses are restored. Another client had planned on getting a new car but decided she would wait for now.
Use That Emergency Fund, If Needed
It is there for that purpose. When this COVID-19 crisis hit, I checked with my clients to make sure their emergency funds were intact, so that they could avoid having to pull money from their investment portfolios if stock prices were temporarily down. In these unusual times, it’s OK to use some of the emergency fund, if needed. For those with brokerage accounts, use these funds as your second option.
Consider Reducing 401(k) Contributions Temporarily
If your emergency fund is getting low and there isn’t an investment portfolio to pull from, then it might be time to cut some of your 401(k) contributions. If possible, leave them at a level that still qualifies you for the company match, assuming there still is one. Many companies have been cutting their match during this crisis in order to be able to afford their employees’ salaries.
It’s preferable to postpone saving for your future for a little while to help maintain the health of your current financial situation. It’s worse to end up having to have an early distribution from your 401(k), as you may be subject to penalties, along with a tax bill.
Look into Refinancing Your Mortgage
Currently, mortgage rates are very low. A person or couple with a significant amount of equity in their home who needs cash may want to consider a cash-out refinancing or a home equity line of credit (HELOC). A HELOC currently offers attractive interest rates and is a good way to tide you over until you can be cash flow positive again.
Be Careful with Your Credit Cards
If possible, do not take on any other new debt. Be leery of using credit cards to pay for any non-essential purchases or racking up any other types of debt with high interest rates. I have seen people dig themselves deep into credit card debt.
The goal is to get through this period relatively unscathed, so you do not totally derail your financial plan. By keeping your expenses in check and finding creative ways to make ends meet now, you will have a stronger financial base to build from later, once the economy and the job market recover.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Patricia Sklar is a wealth adviser at CI Brightworth, an Atlanta wealth management firm. She is a Certified Public Accountant, a CERTIFIED FINANCIAL PLANNER™ practitioner and holds the Chartered Financial Analyst® designation. Sklar uses her CPA and investment background to help develop and implement financial planning strategies for high-net-worth and high-income earning individuals.
-
Should You Get Earthquake Insurance?
Standard home insurance doesn’t cover earthquakes, but paying extra for earthquake insurance isn’t just for Californians.
By Rachael Green
-
Stock Market Today: Dow Drops 699 Points After Powell Speech
Fed Chair Powell warned of a slowing economy and higher inflation but said the central bank isn't ready to cut rates just yet.
By Karee Venema
-
A QLAC Does So Much More Than Simply Defer Taxes
Here are the multiple ways you can use a QLAC, from managing retirement risks to creating income for specific retirement needs and wants.
By Jerry Golden, Investment Adviser Representative
-
Self-Directed Brokerage Accounts: Retirement's Hidden Gem?
SDBAs are often overlooked, but they can offer more flexibility and growth potential inside your 401(k) when actively managed by a professional.
By Scott M. Dougan, RFC, Investment Adviser
-
Early-Stage Startup Deals: How Does a SAFE Work?
Investing in an early-stage startup can get complicated fast, so the venture capital industry turns to other investing options. One is a SAFE.
By Murat Abdrakhmanov
-
Should You Hire a Public Adjuster for Your Insurance Claim?
As natural disasters strike more often, insurance clients are asking, 'What should I do, or who should I hire, if my insurance company is jerking me around?'
By H. Dennis Beaver, Esq.
-
Tips to Help Entrepreneurs Create Self-Sustaining Businesses
With the right processes and people in place, a truly sustainable business can be efficiently passed on to a successor and run profitably on its own.
By Jason L Smith, CEP®, BPC
-
Navigating Annuity Taxation: A Guide for Financial Advisers
Understanding the essentials of taxation in retirement income strategies involving annuities helps ensure positive outcomes for clients.
By Jake Klima
-
How Google Reviews Can Help (or Hurt) Financial Advisers
Don't leave your Google Business Profile unclaimed — someone else can make changes if they claim it. Also, here's what you can (and cannot) do with the reviews.
By Jeff Briskin
-
How Baby Boomers and Gen Xers Are Redefining Retirement Living
Both generations need to embrace change and leverage real estate as a dynamic asset in their retirement planning. Here's how financial advisers can help, too.
By David Conti, CPRC