Budgeting, Personal Finance

Money Makes No Promises

cash bonus

I find myself daydreaming about money quite a bit. It’s not so much about the money I have, but it’s about the money I don’t have…yet. Of course, if you add in my work bonuses and my lottery winnings I’m doing quite well for myself. Well no, I haven’t actually earned these bonuses yet and but I’ve been playing the lottery for a whole three months now so surely something’s got to give. Through life experience (OK, stupidity), I’ve learned that there are some things you just can’t count on when it comes to money.

Holiday Bonus: Do you still believe in Santa Claus? You know, that chubby guy with the white beard and red suit. Do you happen to notice he looks nothing like your boss? That’s right. Your boss is not Santa Claus. I’m sure you’ve more than earned a bonus for the year, however, budgets can sometimes take a turn for the worse. When figuring a budget for the holidays, it is best to figure a budget on money that you already have, not money you think you’ll acquire.

Tax Return In my eyes, this is the hardest windfall not to get excited about. You’ve waited all year to finally get back that hard earned money the government has so graciously taken out of each of your paychecks only to find out that you still owe the government money. Hey, wait a minute. How are you going to pay for those $300 leather boots you bought last week in pre-celebration of your tax return? More times than not, I’ve seen people count on their tax return to supplement some expensive purchase or vacation and they end up having to pay back more taxes and just get themselves into more debt. The best advice I ever received about my tax return was to assume you’re getting nothing, and if you do happen to receive some money back, put it into savings.

Wedding Gifts (money): Brides. Grooms. Yes, I’m addressing you both directly, just in case one of you is not listening. Do not add wedding gifts to your budget. Weddings have gotten extremely expensive so I can see where the idea of assuming you’ll get enough money from your guests to cover part of your wedding could seem like a good idea. However, if you get a wedding guest like me, you’ll be opening a rather handsome envelope only to find a lottery ticket and a cheesy card signed, “Good luck, suckas!” My point being, you should not figure wedding gifts into your overall budget (not even for the honeymoon). You just never know what you’re going to get, even if you do register.

Inheritance: I have one, simple question. If you played the lottery once a month, would you figure your potential winnings into your budget? Now I know, someone dying is not like winning the lottery, but getting an inheritance is. After funeral costs, taxes, and wrapping up any outstanding debt, you’ll be lucky if there’s any money left. Some of you may be more fortunate and know there will be money left, but really, do you know how much you’ll be inheriting? Do you even know if you’re in the will? I once knew a woman who didn’t save for retirement because she was counting on a large inheritance. When her mother passed, this woman unfortunately found out that she was never included in the will because of a missed birthday or something crazy like that. Yep, you guessed it. The woman is still working! Need I say more?

Stocks: I don’t know much about stocks or investing but I clearly remember an episode of Friends when Monica was jobless so she decided to invest in a stock that was named after her initials. That stock went up a little so Monica got excited and invested her entire life savings into that stock. Needless to say, the stock soon crashed and she lost all her money, forcing her to take a job as a waitress at a fifties diner. The point of this story is not to discourage you from investing but to again, remind you that stocks are not a sure thing. You can not count on the money you make from stocks, because you might not make any. And if I may so, Friends was a great show but please do not take investment advice from a tv sitcom.

If you’re anything like me, you look forward to any extra money you can get your hands on, but when trying to figure a budget, it’s best to figure in money that you already have, not money you think you might receive, win, or inherit. If you do happen to acquire this “bonus” money, at least you won’t have to feel guilty when you buy something from eBay.

Image courtesy of TW Collins

5 thoughts on “Money Makes No Promises

  1. Hey I love “Friends” and I remember that funny episode! But I agree that taking financial advice from a sitcom is not a good idea!
    I have fallen for the trap of budgeting for extra expected money, only to find out that I wasn’t getting as much as I thought- or any at all.
    This is especially true with rebate checks. I’ve boughten larger items with the promise of a rebate (i.e. a computer) and then I’ve budgeted that rebate in to help pay for the item when the credit card bill arrives. But guess what- it NEVER comes in time! Now I just figure that the item I am buying is the cost I paid- not the cost after rebate. And when the rebate comes eons later, it’s just some extra fun money.

  2. This can be especially devastating if you have received large bonuses in the past when things at the company were good and have adjusted your spending to rely on the bonuses. I’ve seen this happen to a number of people.

  3. I admit that I do this, but I think many times you have a pretty good idea of what you will receive. I also don’t allocate this money as essential, but as an added benefit to my retirement savings which is a lot different.

  4. Putting all this money toward retirement or emergency fund is a great way to build those. So many people use this type of money as play money when they get it. I agree – never expect it, but when it does arrive, already have a plan in place on how you are going to use it.

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