Money Management
7 Great Ways to Spend Your Holiday Bonus
It’s the most wonderful time of the year — the brisk weather, the bright lights… and the bonuses. Many American workers receive some type of bonus each year (whether it be for the holidays or the year’s end) and several are tempted to spend it in a number of different ways. However, before you go and blow your money on a new TV or down payment on a car, consider these seven smart options for spending your holiday bonus.
1) Put it towards your debt
This is number one for a reason. Before you think about the other options on this list, you should really consider how much your debt is costing you. Whether you use the money to pay down credit card debt, chip away at your student loans, or even making an extra mortgage payment, getting yourself one step closer to being debt free is a great use of your bonus.
2) Give it to charity
If you truly want to get into the holiday spirit consider donating to a worthy charity. Charity Navigator not only allows you to find non-profits that work in areas you’re passionate about but they also evaluate each group to ensure that your money is being spent the way the organization says it is. Plus if you make your donation by the end of the year, your giving could also benefit you when you go to file your 2015 taxes.
3) Start or grow your emergency fund
The new year has a lot of promise but it also has a lot of unknowns. Prepare for the worst by having an emergency fund ready. Many recommend your fund be able to cover between three to six months of expenses. If you don’t have that much socked away, now is the time.
4) Invest it
Want you money to make you more money? Considering investing your bonus in the stock market via a free trading app like Robinhood, on a peer to peer lending site, or perhaps even funding a friend’s start-up. However, make sure you research your investments carefully and find one that’s right for you.
5) Save it for retirement
Another way to make your money grow is to put it in an IRA or other type of retirement account. Even if your bonus is only a couple of thousand dollars, that could turn into tens of thousands by the time you’re ready to retire.
6) Take a vacation
Easily the most fun idea on this list, vacations aren’t just a luxury — they’re a necessity. With all of the stress you experience at work it’s important to take some time of to relax. Why not set aside your bonus for just that purpose and treat yourself some time in the new year?
7) Use it towards fulfilling your New Year’s resolution
Far and away the most popular New Year’s resolution is to lose weight. Unfortunately exercise equipment, healthy foods, and gym memberships aren’t exactly cheap. Perhaps using your bonus to cover such expenses (or whatever costs are associated with achieving your resolution) would be a great use of your extra money.
No matter which of these seven options you choose, you can’t go wrong with these smart bonus spending ideas. Have a happy and safe holiday season!
