Budget to avoid Januworry

MAKE A PLAN: THERE ARE MANY REASONS WHY THE YEAR-END BONUS STRETCHES LESS NOW

- 

The magic moment you waited for the whole year has arrived: the beep on your phone to tell you your bonus is now in your bank account. You open it like you would open a present at Christmas, but why do you feel that you got coal instead of a shiny gift?

You just cannot figure it out. As you sit with your holiday budget, the numbers do not seem to add up. Why does it look like you will have a lot less to see you through to January payday despite getting your standard inflationary increase of 6% earlier in the year?

You are not imagining it, says Boipelo Ndimande, chief financial officer at Consult by Momentum.

“There are a couple of factors affecting take-home pay and it is important to understand what they are so you can make a plan to see you through the holidays.”

There are various reasons why your year-bonus suddenly seems a whole lot smaller, such as:

Tax bracket creep: Because the finance minister did not adjust income-tax brackets for inflation at this year’s budget speech, any increase you received pushes more of your earnings into a higher tax bracket that was not adjusted alongside inflation.