Spending bonuses wisely
A bonus is a great financial boost, often coming at a time of the year when many people are tightening their belts. While the temptation to blow your bonus on a desirable item or a shopping spree can be considerable, there are far more practical, and ultimately more profitable, ways to spend your bonus.
Spending your bonus wisely is not about depriving yourself. There is no reason not to spend a portion of your bonus on your year-end holiday or on an indulgence that you have been craving.
But by sensibly investing at least a reasonable portion of your bonus, you can do yourself a tremendous service in the medium or long-term.
One of the best, and most immediately beneficial, ways to use your bonus is to reduce your debt. You can put the money straight into your bond or use it to help pay off your car, or other assets.
Reducing your credit card debt
If you are paying interest on your outstanding credit card balance, it can be extremely beneficial to use your bonus to reduce or eliminate this debt. Reducing debt on which you are paying interest is a priority. While you may feel like you are momentarily depriving yourself by using your bonus to reduce your credit card obligations, you will subsequently enjoy paying less during the course of the following year – and ultimately save money.
Speeding your year-end bonus on lowering credit card debt is a practical way to turn over a new leaf. You are cutting debt, reducing interest charged, and reducing your monthly costs for the following year.
Investing your bonus
Where feasible, you may also wish to save or invest a portion of your bonus for the longer-term.This may take the form of a simple saving plan, so that you have a cash sum available when you really need it.
Alternatively, you may wish to choose a more aggressive wealth-growing option. There are various investment alternatives, each with a degree of risk, so it is always advisable to consult a suitably qualified person before making any investment decisions.
If you already have an investment fund, such as a pension plan or growth portfolio, you may elect to boost your investments with your bonus.
If these recommendations sound too austere for your tastes, remember that they will ultimately pay off. Sensible investment will secure a stable financial future. And by reducing interest charges, you will end up saving money, helping you to get the things that you want.
Questions and Answers
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