What to do with a bonus
Many people get a large or small bonus around this time of year. It’s super tempting to go and spend it all on something fun or even something you think you “need.”
Plan Ahead for Maximum Responsibility
BEFORE you get a bonus or other large amounts of “extra money” is the best time to decide where it should go to make the most meaningful impact on your finances.
Pay off Debt
If you have a lot of debt, then the best thing is to put it towards that. Large amounts can really move the needle on your debt repayment plan and will lower your overall interest paid pretty significantly. Put it all towards one of your bills.
Do you have a fully-funded emergency fund? If you don’t and are not close to having one, then put a large amount of your bonus towards this. The emergency fund is one of the most important assets for your financial health and emotional well-being. I
Are you barely covering your bills? Is there an “envelope” that never seems to have enough? If bills are creeping up on you, consider placing a significant amount to help bulk up your bills “envelope” and help buffer some hard months.
Want to read more about what to do with an end-of-year bonus?
Click here to read more!