6 Smart Ways You Can Spend Your Bonus

By Michelle Wanjiku
Every once in a while you could get a bonus whether it is over Christmas or when the company performs well, this then means that you have extra money. However, most people make the mistake of spending this money on frivolous things that don’t add any value to them.
So how do you ensure that when you get a bonus, you use the money to better your life and improve your financial status?
1. Start (or contribute more to) an emergency fund
It is important that you have emergency fund ready with at least enough money to cover three to six months of expenses.
Your bonus should go into this fund because you never know what might happen, you could lose your job or need to pay large medical bills.
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2. Put it into your retirement
You may think you have a lot of time before you have to think about retirement but in reality the earlier you start to plan for retirement the better.
You don’t want to start changing your lifestyle after you retire because you cannot afford to live like you used to.
The bonus you receive will be of good use to you if you put it into your retirement fund. This is money that will come in handy once you don’t have constant income coming in.
3. Start a college savings account for your children
Since your bonus is extra income you had not planned on getting, you can use it to start an education fund for your kids, this way they don’t have to struggle with fees when they get to university level.
If you start saving now, then by the time they finish high school, you will have enough to pay for the full four years without going back into your pocket and affecting your financial plan.
4. Put money aside for a big purchase
Instead of using your salary to buy that new TV or sofa set you want, why not use the bonus you receive. This will ensure that you don’t have to go into your normal savings and thus upsetting your budget.
This is a much easier way to buy what you want without actually leaving a dent in your finances. Depending on what you buy, you can start saving up any bonus you receive and in the end make the purchase.
This way, you get to actually buy what you want while still maintaining your financial freedom.
5. Start investing in the markets
The mistake that most people make when it comes to money is not investing. You can save a lot of money but if you don’t invest any of it then you won’t be able to achieve true financial freedom.
With your bonus, you can take the plunge and invest in something that will yield results. Investing will ensure you have an extra source of income which will help improve your financial situation.
6. Invest in yourself
How many times, have you come across a course you wanted to take but couldn’t because you didn’t have the money?
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Your bonus could enable you to take such courses which would improve your value as an employee and then help you achieve career growth.
In conclusion,
Just because a bonus is extra income doesn’t mean that you can then spend it haphazardly, if you are smart about how you spend it, you will be ensuring that you achieve your financial goals a lot faster. In order to achieve financial freedom you have to be smart about how you spend your money no matter where it comes from.
The writer is a Communication Officer/Digital marketer at Career Point Kenya. Email: michelle@www.careerpointkenya.co.ke