Here is how I would spend my bonus

12/07/2017

I remember when I was still in full-time employment and I got a bonus. When I got the email with the news, my head went into a frenzy on the things I could spend it on. It was a sizeable amount. I knew what I needed to buy but I was lured by so many things that I didn't necessarily need. I felt like I deserved to splurge because I've earned it. So I went ahead and did my thing. And yeah, I blew it. 

No matter how financially responsible you are, it’s human nature to want to treat yourself to something special. Since you worked hard to earn that bonus, there’s no reason you shouldn’t. However, don’t throw smart spending out the window just yet.

So today I got thinking if I had the same bonus again what would I do with it? 

1. I would use it for some home improvements. I want to change my sink. I have been researching sinks, and I already have an idea of what I want. 
Why is this a good use of my bonus:  I read that the kitchen and bathrooms are key areas that hold their value. This is an investment for me. However, not every home renovation isn’t an investment. So if you are thinking of renovating, focus on those two areas. But don't take on debt to renovate your home in order to increase your home’s value. Remember rates are poised to rise, which will prompt a cooling housing market and declining housing prices.

2. I would adopt a family this December. It's been a hard year for most families so I would use some of my bonus to make sure that they have a good Christmas meal. For me giving is not just about handing out nice food and a few presents. I want them to have something to put in their cupboards at home and get them through January also. 
Why is this a good use of my bonus? Spending money on others is a guaranteed way to boost happiness.  I don't know how that works but it just does. Like I always say, giving kills greed. While you prepare for the holiday season and get ready to celebrate with family and friends take a few moments and think of a family you may know, perhaps within your own church or neighborhood that has fallen on hard times.

ALSO READ: Harness the power of money in your life

3. Paying some money into my home loan. I've been doing this for the last three years. Paying off my home loan is more of a priority to me now than taking a holiday. I do spoil myself with the occasional full body massage. It's the best treat!
Why is this a good use of my bonus? The benefit of having a paid off home loan means being free to pursue things that I enjoy. I want to stay in the house for some time, so I don't want the burden of the loan. If you’re selling your home within a few years, don't worry too much about paying it off. Remember, interest on your home loan is calculated each day on the outstanding balance. Paying off a home loan faster isn’t easy, but it isn’t super complicated either. It takes planning, focused attention and some discipline. I started simple and slow and built from there.

4. Spend it on an experience. I have a few things I want to do. They are not huge and they are in my city. I would definitely go bungee jumping again or do another Red bus tour of Soweto. I grew up in Soweto so I'm always fascinated by the changes that the township is always going through. 
Why is this a good use of my bonus? Research has shown that experiences bring people more happiness than do possessions. I have personally proven this. I will still keep to my budget because let's face it, many of us are in debilitating debt because we spend our money on experiences e.g. holiday, we couldn't afford. 

If you are lucky to get that bonus this season, use your bonus in a way that you feel good about and do something that gets you enthusiastic about your overall financial life. Remember, you don’t have to direct your entire bonus to one area. You can divide it up and designate a certain percentage towards each of your financial priorities. And don't let the festive mood get in the way of your financial goals. Use your bonus wisely.

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Disclaimer: This article contains general information and explains options you may have, but it is not intended to be investment advice or a personal recommendation. We can’t personalize articles for our readers, so your situation may vary from the one discussed here. Please seek a licensed professional for tax advice, legal advice, financial planning advice or investment advice.

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