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Holiday bonuses in 2020: A CFP weighs in on how to 'bridge the gap' if you aren't expecting one this year

CNBC Select spoke with CFP Roger Ma about how to navigate not receiving a holiday bonus this year.

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Holiday bonuses are traditionally given out to employees at the end of the year as a token of appreciation for their hard work.

But these bonuses are often tied to a company's overall performance throughout the year, and 2020 has been a tumultuous one for many businesses. There's a good chance your employer may not be able to put extra cash in your paycheck this holiday season.

For those who count on this end-of-the-year bump to offset holiday shopping expenses, or to help cover year-end bills, now is the time to start planning differently.

There are several things you can do to help you bridge the gap," says Roger Ma, a certified financial planner at lifelaidout® and author of "Work Your Money, Not Your Life."

CNBC Select spoke to Ma for his best advice on what to do if you're not sure whether to expect a bonus this year.

Put together a 'financial report card'

Assembling a "financial report card," as Ma calls it, is smart to do any time of the year, but during the holidays especially.

Before you go shopping, put together a report on where your finances stand so you can see where you're at and what you can afford — before you even factor in a potential holiday bonus.

To create your own financial report card, dedicate a couple of hours to plugging your savings, income and monthly expenses into a spreadsheet. Document how much money you have in your checking and savings accounts, how much income you expect to bring in the rest of the year and how you plan on spending it (including both fixed costs, like rent, and discretionary expenses, like gifts). A financial report card is a lot like a monthly budget.

To get a full picture of your finances, make note on your spreadsheet your current credit score. This three-digit number gives you insight into what credit cards or loans you can qualify for and what interest rates to expect. As part of your financial report card, you can keep track of your credit throughout the rest of the year by signing up for a credit monitoring service.

Consider CNBC Select's top-rated credit monitoring service: CreditWise® from Capital One is a free service open to anyone — regardless of whether you're a Capital One cardholder — and it has a credit score simulator where you can check the potential impact that certain actions, such as paying off debt or closing a credit card, can have on your credit score.

Look for expenses you can cut

Once you have your financial report card and know where you currently stand, start to cut expenses that can make up for any extra cash you would have received from a holiday bonus.

For example, if you usually depend on a $100 bonus to help you pay your credit card bill after the holidays, look for $100 (or more) in your expenses that you can eliminate. Cutting back can help you feel more in control of your money without having to rely on a bonus from your employer.

Ma recommends looking for areas that you can temporarily (or even permanently) scale back on, "whether it's cutting the extra premium channel, forgoing the additional streaming service or making lunch or dinner a couple more times a week," he says.

Take a look at your latest credit card statement for recurring monthly subscription costs you no longer use and make sure you're using a no-fee checking or savings account if you don't already. When doing any holiday shopping, refrain from using out-of-network ATMs that charge you fees. These small expenses can add up if you don't keep up with them.

Learn more: How much should you spend on holiday shopping? A financial planner weighs in

Re-evaluate your job and role overall

If your annual holiday bonus is what makes your current job "worth it," Ma suggests that it may make sense for you to re-evaluate the company and your role in it.

"Being very upset about not receiving a holiday bonus may be a signal of a larger problem in your job," Ma says.

Start by writing down what you like about your job, don't like and what may be missing. Consider your skills and what you're good at. "Take the opportunity to put your job to the test and to figure out what roles may be a better fit," Ma says.

"Optimizing your human capital, or your ability to work, may be the best thing you can do to also optimize your financial situation in the long run."

Learn more: A financial therapist shares her psychological trick to save money this holiday season

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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