Finances

10 Ways To Wisely Spend Your December Bonus

10 Ways To Wisely Spend Your December Bonus. The year is about to end and many are expecting their 13th cheaques. You have probably worked hard since January and looking forward to your reward. The following tips can help you to not blow away your bonus and get stranded come January 2019.

1. Have A Plan

You will thank yourself for making smart decisions today. Investing your bonus sensibly now could be a lifesaver or a pleasant luxury further down the line. Then you can relax during the holiday season, knowing that your investment will already be earning returns by the time you get back to the office, energised and ready to take on the New Year.

2. Pay Down Short-Term Debt

A sizable portion of your bonus needs to go towards paying down any short-term debt that you may have. This debt may be in the form of credit cards, store cards or personal loans. These are the most expensive, and should be paid off first as a result. If you can, consider using your whole bonus to pay off this type of debt — it may be difficult, but just think how much extra you’ll save every month if you don’t have to pay off expensive debt.

3. Put Some Money Into Your Home Loan

If you don’t have any high-interest short-term debt, put your bonus into your home loan. Reducing the outstanding balance on your home loan will reduce the interest charged. This has two benefits — paying off your loan sooner, or having access to funds in the future if you need them.

4. Pay Your Car Installment

Paying a couple of thousand Rand extra for your car loan can cut down your installments by a month or more. This is because that couple of thousand will cut down your interest rate, which can take a huge chunk off the monthly installments that you pay for your car. So if you are looking at paying off your car sooner, put some of your bonus money into the car loan.

5. Pay School Fees

Imagine the peace you will have knowing that you have paid or budgeted for your child’s school fees for the upcoming months?! Some schools will even offer you a discount if you pay all at once. You can use the money you were going to budget for school fees to reward your child in the new year for each time they get good marks.

6. Renovate Your House

Look at little improvements that you can do to your house that could increase the value of it. For instance, put in new wall units or insert burglar doors. These are lifetime investments for your house.

7. Save For Rainy Days

Consider expenses you will definitely be faced within 2019, such as school fees, any holidays that you have planned or home maintenance, and put money aside for those costs. On top of expected costs, you will also need to put away an amount towards unexpected costs.

8. Pay In Advance To Take Advantage Of Discounts

Paying for expenses like school fees, medical aid or insurance policies in advance usually means at least a 5% discount. Not only will you save money, but you’ll also free up part of your monthly income, which can be used for emergencies

9. Invest

Aside from savings and wise spending, investing is another great way to use your December bonus. Not only are you putting your hard earned bonus away, you will get something in return also. You can think of a small business which can give you the right profit.

10. Have Some Fun

Leave some money to reward yourself for all the hard work you put in during the year. If you have been dying to buy that pair of shoes, go ahead and buy it. Just make sure you don’t spend half the money on buying things like take aways or spoiling everyone else in your family with things that aren’t necessarily needed.

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