Employers are feeling especially generous this season.
After one year unprecedented workload in the middle of a job market more and more competitive In most industries, the number of employers offering year-end bonuses to their employees is more than twice as many as last year.
Google said it would give all employees, even interns, a one-time cash bonus of $1,600, while Tyson Foods said it is paying hourly workers at its meatpacking plants between $300 and $700 each this holiday, in addition to a pay increase and a more flexible work schedule.
Nearly a quarter of all companies, or 23%, say they are offering performance-based bonuses, up from 12% last year, according to Challenger, Gray and Christmas. highest percentage mark since the placement company started tracking performance bonuses. in 2015.
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Many companies also say they are increasing the size of bonuses. About 17% said bonuses would be bigger than last year, noting another recent high.
“We tend to see bonuses increase at times when the labor market is really tight and that’s clearly what we do,” said Andy Challenger, Senior Vice President of Challenger, Gray and Christmas. are seeing right now”. “The staff is in the driver’s seat.”
For workers who have to face expensive Challenger adds that, as we head into the holiday season, these bonuses come at a particularly good time. “Having some extra money in the bank account is worth it.”
How to make the most of your bonus
In challenging times, a one-time deposit can have a big impact on your financial well-being, depending on how it’s used.
Shelly-Ann Eweka, senior director of financial planning at TIAA, recommends breaking down payments into three categories to focus on repayment, savings, and even some discretionary spending.
1. Pay off debt. Start by addressing your financial “red flags”, she says, including high interest rates Credit card debt and payments stress you out.
Under normal circumstances, special credit card debt hard to pay down, especially with an average annual percentage rate of more than 16%.
And the card balance is slow ticks higher after Americans paid off record $83 billion in credit card debt in 2020, backed by government stimulus checks and fewer opportunities for discretionary purchases.
If you don’t get a match, that’s priority #1.
Shelly-Ann Eweka
Senior director of financial planning at TIAA
That makes it a good time to get rid of those balances again, now available $5,525, Medium.
2. Savings. Some money should also be put into an emergency fund or long-term savings account, Eweka advises.
For more impact, workers have 401(k) Plan can increase their savings rate at least enough to get suitable for full owner.
“If you don’t fit, that’s priority number one,” Eweka said.
On the other hand, if you’re on track to reach your retirement goals and your consumer debt is under control, parents may want to consider a donation to 529 college savings plans because many tax advantage, Eweka added.
3. Spending. Of course, most people probably want to save at least a little, and that’s understandable. But instead of blowing it into an impulse buy, “get strategic,” says Eweka.
Whether it’s taking a class, investing in a personal trainer or exercise tools, buy a few important parts for a new wardrobe or support a charity that makes sense to you, “it should be used to push you forward,” she says.
