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Savvy ATM: What to Do With Your Bonus

While the holidays are behind us, hopefully you're still holding on to your bonus if you received one. I know that many companies don't give bonuses until February or March, so if you work for one of them then you have some time to decide your bonus's destiny.

Many companies give the option of directing a percentage of your bonus into your 401(k). It's a great option because that money skips your bank account and heads straight for your retirement account. In the past, I've used part of my bonus to pay off any lingering credit card debt which should be high on your list of priorities.

I'm sure what I'm about to say would enrage some really serious savers, but I think it's okay to treat yourself to something with a designated amount from your bonus after you've taken care of the items mentioned above. Think of it like a little allowance to buy yourself something fab that you've had your eye on for awhile, or maybe put some of your bonus towards a vacation fund. As long as you're financially healthy, why not live a little? Just make sure you don't spend your bonus before it's given to you.


Tari007 Tari007 9 years
My bonus is going straight towards paying my VISA. I can't save a penny when I have cc debt, I simply can't do it!
bizzybee bizzybee 9 years
There is a saying, I believe it's attributed to the Rockefellers, and it goes something like this "Give some, spend some, save some."
chicfille chicfille 9 years
I was planning on applying my entire bonus to student loans since I still have a lingering $5000...then again, my measily bonus wouldn't make a huge dent so I'm reconsidering using 200 of it for something new! We'll see...the debt business is most certainly stressing me out! I know it's not bad, but I feel like it never goes down!
PeachyKeen19 PeachyKeen19 9 years
Thanks msdyanelk, I will seriously consider doing that :)
katherynn katherynn 9 years
If I did get a bonus (which I dont) I'd use it all for debt. I want to get serious about paying off my debt! I could divide it like a pie do a little for savings, and a little for this or that.. but the philosophy I believe in is.. why would I borrow on a credit card to cushion a savings account? After my $1000 emergency fund is in place.. I'm set... Why not go ahead and pay off that debt and then work on saving? I want to get Gisel intense on my debt... I did some research last semester on Credit Card companies and you'd be suprised how they make their money and profit. One tidbit and then I'll jump off my soap bos :) Each year, Americans go billions of dollars in debt, while the credit card companies PROFIT those billions! Just think, for each dollar you spend on a credit card, it goes straight into the lender's pocket. "The rich rule over the poor, and the borrower is slave to the lender." (Proverbs 22:7)
monkeygirlm monkeygirlm 9 years
Props to LaLaLaurie. And msdyanelk. And bingkaycoy. All of you! Lots of smart females on this site. I will be putting 3/4 of mine to debt and 1/4 will be invested in my side business. Fortunately, I make jewelry for a little profit and test-driving my product is required so anything invested there is almost like spending on myself! Asia84 has it down - take some money out of the profit for the self, I just keep putting the profit back in the business. Where do I get anything? Oh, nowhere.
insanitypepper insanitypepper 9 years
I've never worked at a place that gives out bonuses. If I got one, it would go straight to paying off debt. That's what I do with all "bonus" cash like tax returns and birthday gifts.
gruaig_rua gruaig_rua 9 years
No bonus for government workers here :( But I did get bonuses in past jobs and usually bought something nice then saved the rest.
brienna_f brienna_f 9 years
Good Advice! This is a great addition to the web site!
msdyanelk msdyanelk 9 years
@PeachyKeen...I would definitely reconsider. Even if you do not expect to be on your current job long, anything can happen. In terms of the percentages, I started with 5%, went to 8%, now I am at 12%; I've dropped as low as 3% Since it's deducted pre-tax, see which level you are comfortable with once you have your paycheck in hand. I play with the amounts at my leisure which I am able to manage at If you leave this job, check with your benefits department to see which alternative savings plans will allow you to rollover your contributions. Anything is better than nothing.
msdyanelk msdyanelk 9 years
Bonus? I could be so lucky. I soooo want to pay off my Capital One credit card debt to zero; cut up the MasterCard and keep the Visa since it's the oldest card of the two. I would start dumping various amounts into my ING account(s) to keep reserve for that "Rainy Day."
cassedy04 cassedy04 9 years
i need to start saving more... that baby's going straight to savings.
LaLaLaurie06 LaLaLaurie06 9 years
i just put mine into my savings account. i need all the extra money there i can get.
7kimba7 7kimba7 9 years
I put most of my tax return and bonus into ING, unless there are bills to pay off or something else pressing. ING rules.
Asia84 Asia84 9 years
with my tax return i almost always spend it on me; i usually get it around my birthday, so i have an excuse to Love ME and not my savings account. (lol)
Asia84 Asia84 9 years
well, i have one steady job, and then i do alot of freelance work, then there is the jewelry line. so whenever i make money from freelance or the jewelry line, i consider that a bonus. i put most of it away in savings(for instance:$ 700 for a day of styling- i put $600 in the savings and spend $100 ).
PeachyKeen19 PeachyKeen19 9 years
How much should you put into your 401k? I once read that it's good to start with 8% of your salary and then work to 12% Oh, and if your company offers "company match" to try and sign up for that as well...this does sound like a great idea. I actually have had my job for a few months now but I didn't expect to be there long, so I didn't start a 401k. Maybe I should reconsider?
rosey_y rosey_y 9 years
Great advice! I'm very financially focused (what can I say, I'm an accountant, haha) but it's important to be able to reward your own hard work and live a little. That's the whole point of earning and investing - to make life better for yourself. (I also agree with what sweetpeabrina said about high interest debt - a good point to keep in mind.)
bellanatella bellanatella 9 years
I'm a VERY serious saver, but I'm not enraged. You're right :) Once in awhile, it's ok.
bingkaycoy bingkaycoy 9 years
I give it to charity in my country, not in America. There are more "hungry and poor people " in my home country
wackdoodle wackdoodle 9 years
I wish I still had my union bonus but apparently my family is full of money psychics. (Didn't say anything to them about my money for nothing bonus- I had plans to open an Orange Savings Account with it.) So I get the lovely TF check and my sister calls she's short several hundred dollars (and I mean several hundred) on her house taxes, if she waits til her next PD she incur a huge penalty - chang ching! My older nephew's needed immediate emergency repairs to his car and his job as a skating school teacher and full time college student couldn't cover the cost - chang ching! I needed an emergency MRI and my insurance company couldn't figure out how to approve the doctor's STAT request so I had to pay out of pocket w/ the promise from the insurance company that I'd be reimbursed- still waiting. That left my with $20 - then my cat's expected freaking food! Can you believe it? I'm off work because of the emergency problem that required the emergency MRI, I've got no money coming in (no disability check due to a delay called December) and those darn cats want to eat. Uggh, cat food w/ coupon and PetCo discount card left me with $7 of my union bonus. And very happy that I even got a bonus to begin with even though I only had $7 left.
sweetpeabrina sweetpeabrina 9 years
I know saving is great but I think it's better to pay off your high interest debt before putting anything into savings. The way I see it, the return you get in a savings account is far less than the compilation of interest fees.
allieperez allieperez 9 years
I feel like I'm doing pretty well in paying down my credit card bills but Christmas time I get a nice bonus and that is used to buy a little something pretty for me. During the year I get small bonuses and those go towards a bill or something that I'm saving up for. My belief is that bonuses are to treat yourself to something you have been wanting because you work so hard for it.
KWM KWM 9 years
I think it's always ok to treat yourself a little with your bonus. What are you working so hard for if you don't get a little reward every now and then!
Lorelei-Spirit Lorelei-Spirit 9 years
I should add that I don't use credit cards, and my company adds money to my 401K in addition to the bonus check. We're pretty well taken of here. :)
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