Know the Tips About How to Spend a Year-End Bonus
If you are someone who is about to receive a big year-end bonus, then you might want to start thinking about how you should utilize it wisely. This article provides you some of the best tips on how to spend your year-end bonus effectively. Let’s get started!
Reward Yourself by Splurging a Little
While it is true that achieving financial goals is important and that is where you should focus the most with your year-end bonus, you should also allow yourself to enjoy a little. You can easily do this by taking a small portion of your bonus and spending it on something you have always wanted. Hard work definitely deserves to be rewarded. But at the same time remember not to go overboard with your spending.
Consider Paying Off Your Credit Card Debt
Paying off your credit card debt could be one of the best decisions that you can make when it comes to utilizing your year-end bonus. Around 60% of Americans have reported to have credit card debt in the past 12 months according to a study by the National Foundation for Credit Counseling. Paying it off with your bonus will ensure that you save you money, which you would have to forgo in the form of future interest payments.
Start Building Your Emergency Fund With a Year-End Bonus
If you are someone who doesn’t yet have an emergency fund, then you will probably find yourself in a lot of credit card debt every time you make a hefty purchase in which you did not plan. Therefore, as a rule of thumb, it’s good to stash away up to six months worth of expenses in something like a savings bank account.
Save for Your Future Goals
Your year-end bonus could go a long way when it comes to fulfilling all your long terms goals. It could be anything from your early retirement, a college tuition fund for your children, or buying an apartment. Start saving up your year-end bonuses to reach your future goals early.
Donate to the Needful
There have been many studies conducted that repeatedly found that people who happened to spend their annual bonuses by donating to charity were much happier than those who decided to spend it on themselves. Therefore, you can definitely decide to allocate some or all of your bonus to a cause that is important to you at the end of the year when you receive bonus. This can also help you get a tax deduction as well. However, always make sure to do a little research on the organization before you part with your funds. This will not allow your money to fall in the wrong hands or go into a scam.
This brings us to the end of our discussion on how to effectively spend the year-end bonus. Now, do let us know some of your personal strategies for doing the same. Along with sharing what did you do with the year-end bonus that you last received.
