If you are one of the lucky ones that is expecting an end-of-year or holiday bonus, congratulations. The bonus season is good to you. We are hoping it’s one of the things you are grateful for this year.
For many, this might be an opportunity to treat themselves to that vacation or finally get that red bottom loubs. But not you or at-least not so fast. You have to read this first before you take the next step because you are smarter than that. This bonus has to be spent in a way that will greatly shape your future and help you move closer to your financial goals.
The question then is how should you rather spend your bonus?
Since bonus is more or less a found money and since you have survived through the year without it; it thus presents itself as the best option for making great financial headway.
Luckily for you, we have taken the pain to scout what we consider great advice from financial experts and also added our personal thoughts on what we consider a better way for you to spend your bonus.
Firstly, there is no better way to deal with this than to look closely at what your financial priorities are.
Treat yourself: You deserve it. Think about it, you have worked your ass off through the year for this. The least you can do is take 20% – 30% of the bonus and give yourself a memorable treat.
Here is a great list of ways you can give yourself a treat.
Pay off Debts: If for whatsoever reason you have found yourself in debt. A percentage of this bonus should go into shaving a chunk off this debt especially those ones with high interest rates. There’s nothing better than having a breather at the beginning of a new year. Debts is nothing but a burden, especially bad debts and you need nothing more than to free yourself of it for the fresh year.
Bump up your Emergency Fund: Life throws it’s surprises at us at anytime unannounced; and many times, this surprises are financial. Having a “fallback” at such times, can be life saving.
Think of loosing your job or health emergencies. None of these things announce their visit. Think of the emergency fund as a safety net for when any of the above occurs.
Experts generally advice putting aside, 3 to 6 months of expenses in your emergency fund.
Invest in you retirement savings: You are definitely young today but that will not always be the case. As unattractive as a retirement savings might sound, you will need it.
For those of you employed, your workplace plans are a perfect place to start. For self-employed, all you need to do is approach the account manager at your favorite bank and ask for advice on their best offerings.
The critical thing is, you need to start now to save for your retirement.
Support a Charity: Holiday seasons are also season to show love. Put a smile on someone’s face or facilitate a community project. Take a percentage of the bonus, whatever works for you and either champion a cause or partner with an charity group to reach out to others.
This will go a long way in teaching you about sharing and also gratitude. I bet you will feel better when you see the joy on the faces of people whose live you have touched.
If you liked this article, kindly share below other best spending options you know for a holiday bonus.