5 Smart Ways to Spend Your Holiday Bonus

Are you one of the lucky people who secured a Holiday/end of year bonus this year? If so, Cha-ching!! Before you decide to buy a pair of Louboutin’s or a 65” TV, I’d like you to consider some smart money moves to help you maximize this windfall.

5 Ways to Effectively Spend your Holiday Bonus

1. Knock out your debts

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Wouldn’t it be a relief if you could be free of debt, or at the very least pay some if it down? If you have outstanding debt, especially high interest credit card debt, you can use some of your bonus to nip this debt down.

If you already have paid off your credit cards (YAY!!), then throw some of your bonus money on your mortgage. Remember, by adding an extra mortgage payment you are getting closer to paying your house off earlier.

2. Invest in yourself

Education is often seen as the great equalizer, so don’t forget to invest in yourself. Consider using a portion of your bonus to invest in your personal growth. Look for courses or seminars that can help enhance your knowledge and skills, this new found knowledge
can open better career opportunities.

3. Power up your emergency fund

Okay, I know that saving money for a rainy day isn’t as exciting as getting a Gucci bag or new TV, but having a some money squirreled about in a separate account that is ready & waiting for you when poop happens is essential. Some experts believe that having 6 months saved up for a rainy day is a good way to be prepared for the unexpected. This is the money you can use if your car breaks down, your dishwasher stops working or you lose your job. An emergency fund is your safety net.

4. Beef up your retirement account

Think you’re too young to think about retirement? Think again. It’s never too early, or too late, to invest for retirement. Consider using some of your bonus to add to your RRSP, or 401k. Consider it as a gift for yourself and for your family.

5. Have some fun

Don’t forget to enjoy life. Be sure to use some of these funds to do something fun – have a spa day, go for a fancy meal, whatever you decide, enjoying your money as you save and invest is essential.

Summary

If you are lucky enough to get an end of year/Holiday bonus this year, try leveraging the ideas mentioned above and put this money to work. Remember, you don’t need to put the entire bonus on one item, you can mix and match and use this money in ways that suits your financial situation.