Wise Tips and Tricks To Budget Your Holiday Bonus

Advisor August 25, 2019

Another year officially began and most hardworking employees have already received their bonuses from the holidays. Some may have already spent it on all the things they think they deserve, there are still some who don’t really want to splurge. Keep in mind that these bonuses are a reminder that you are given a chance to spend money on what you want and not on what you need, however, it doesn’t mean that you must water it. Here are some of the wisest ways to use your bonus.

Pay Your Debt

Your bonus can help you ease your debt without disrupting your current budget

One of the biggest mistakes that people usually make is that they tend to let their short-term debt pile up so that when the time comes, it will be too big that they could no longer afford it. Having a bonus gives you an opportunity to use some of this spare money to pay for the things that you bought with your credit card.

It is your own debt to pay, after all, those debts won’t go away even if you ignore them, so the best thing to do is pay your credit card bills while you can, or any personal loan that you have. Your entire bonus doesn’t need to be put on it, just figure out which of your loans need its payment first.

Boost Retirement Fund

Another great thing to do with your bonus is to add it to your retirement fund. We all know how important it is to have enough money once we retire, that way we don’t need to worry about our expenses since this will be where you will get your money once you’re no longer working. Some people tend to think that they could worry about this later in life and that they don’t need too much attention to this since they are decades away from retiring. However, it is never too early to save up for it since, at the end of the day, you will be the one to benefit from it anyway.

Add To Emergency Fund

You never know when you’ll need money in a serious situation, so better save than regret it later

For some people, bonuses are given so that they could fulfill their short-term happiness. That they must spend it on their wants instead of their needs, it may be true in a way but there is no better way to save money than to put it on your emergency funds. You might be thinking that putting it on your emergency funds will somehow be useless for you since a bonus must be spent to provide your happiness. You don’t necessarily have To out every single penny on it, you can simply get 10 to 20 percent off of it and then use the rest for other things.

Make Investments

Saving money is always a good thing, but how about if you take a risk and make an investment to grow your money. Some people don’t want to take this risk because they are afraid that they would make the wrong decision and they will just waste their hard-earned money.

One good way to take this risk without feeling that much guilty is to get a small portion of your bonus and make an investment, keep in mind that if you don’t take the change to take the risk, then you will not see any changes at all. Just make sure that you will only be using a small percentage of your bonus for an investment you’re interested in so that you will regret putting too much for nothing if ever it fails.

Splurge Some Of It

You can always splurge, but don’t go all out

Finally, it is a bonus for a reason so you have every right to simply spend it however you want. If you wish to buy new stuff for yourself or your house then go ahead, you’ve worked hard so you’ve earned it. However, you can still save the remaining money for something better, such as saving up for that dream vacation you have always wanted.

A bonus is like a treat that you give a dog in addition to the food they get, especially if they have been good. Treat yourself every once in a while, don’t forget your own value and happiness. Money may not be able to buy you everything your heart desire but it doesn’t mean that it cannot buy you something that would make you happy. Cost and worth are two different things, so always know where you put your money on.