5 Ways to Spend Your Work Bonus this Year

Hello, sweet friends! Happy Thursday to you 🙂 With spring quickly approaching, there are a few things on my mind: pastel colors, vacation and bonuses. Even in my time of being full-time self-employed, the beginning of spring was the time I gave myself a bonus for the past years work. For my corporate world readers who get bonuses, I’m sure this is also something on your mind as we move quickly through February. The question after we get the bonus in hand is: how should I spend this? In true adulting fashion, most of us are wondering this after getting the check/deposit/transfer when we really should be thinking about it before we get it. SO, let’s jump into how to spend your bonus this year (that your future self will thank you for):

1 | Pay yourself first – If you’ve read any popular business books lately, the first tip many of them give is to pay yourself. So often, we think about paying ourselves last and then immediately regret it when we don’t have the thing or the experience we’ve been wishing to have for the past two years. Use 10% of your bonus to pay yourself and use for anything you want without guilt. Need a wardrobe upgrade? Use your 10%. Want a luxe spa day? Use your 10%. Been looking at a fun vacation? Use your 10%. This portion of my bonus is going to finishing up my apartment decor with new bedding!

2 | Debt  (I know some people may argue with debt being second, but hey, can’t win them all right?) – I, like many of you, have student debt. I currently have a chunk of student loans left and will be stacking on more while attending graduate school. Love it! In addition, I have minimal credit card debt (also from college) that I’m 1/2 done paying down – Hooray! Looking at a bonus for this year, best bet would be to put minimum 30% towards your debt. Paying off a chunk decreases the amount of interest you pay and will trick your brain into wanting to pay more in the future because of the impact a big chunk will make. If you can, increasing your debt portion to 35%-40% would be even better.

3 | Annual fees – Have you ever noticed the price difference in paying a monthly subscription for something like Adobe verses paying annually? Website hosting, co-working spaces and gym memberships tend to be the same. In general, you save 20% by paying annually versus breaking up payments month by month. Other things such as your renters insurance or Prime subscription don’t typically have a price difference between monthly and annually, but would be great places to start paying annual costs with your bonus. If you want to put your biggest costs up front versus your $21 adobe or $13 Prime, your car insurance would be perfect to pay for 6 months. This pocket of your bonus should make up 10$-15%.

4 | Savings/investing – Since millennials need to save about 40%-50% of their income to retire at 65 like our parents, and because most millennials more than likely cannot do that, using a large chuck of your bonus to save and/or invest is something you will definitely thank yourself for. Ideally, 30% of this years bonus would go straight to your savings or investments. In the case that you have no debt, MAX OUT YOUR SAVINGS. Seriously, put 60% of your bonus to savings and/or investments if you have zero debt and don’t look back.

5 | Give – I wholeheartedly believe that the secret of having more than enough is giving. Even back in high school when I worked at the mall (RIP Delia*s), I tried to give at least $20 (LOL) to student orgs baking events. And because I was also in student organizations, I felt more compelled to give knowing that each student organization didn’t get the same amount of money for trips or events. On my post-college/adulting salary, I have found that I give to the same organizations: She’s The First, Third Street Community Center & GoFundMe. I am definitely that person that sees a sad story with a GoFundMe and immediately donates. I don’t know the people I’m giving to but I feel like if it comes across my screen and I’m able to give, that I should do it. Lastly, if you tilthe, you know where the first 10% goes!

So, if you’re post-tax bonus is $5000. Here’s what a breakdown could look like for you:
$500 to yourself
$2000 to debt
$1500 to savings
$500 to annual bills
$500 to donate/tilthe

Keep in mind that if your bonus is not taxed, 30% should be put aside for taxes.

How do you plan on spending your bonus this year? I would love to know in the comments 🙂 Thanks so much for reading guys! -xo, Azanique <3