Budgeting when income is weighted towards bonus?
A bit of a more boring topic, but for those bankers/investors who have made it to VP+ level where a large share of your income comes in the form of the year end bonus, how do you budget/plan your life? The base numbers simply won’t cut it if you stay in NYC and start having kids etc, but it also isn’t prudent to assume a healthy bonus every year to bridge your finances. All this to say, what is standard? Living slightly above your means relative to your base, praying you don’t get a zero bonus or you’ll go into debt, living off last years bonus? I’m most interested especially in fixed costs such as rent, mortgage, cars etc? If you put your income into a “how much house can I afford” site would you think of it in terms of your Base + bonus, base + .5 bonus etc?
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