Money Monday: 5 Ways You SHOULD Be Using Your Work Bonus
There's nothing quite like finding yourself with an extra chunk of change (no matter how large or how small.) Perhaps it's a quarterly or holiday bonus, a nice tax refund, or just an unexpected birthday check from the grandparents - any additional income that finds its way to you can put you in a better position financially, assuming you use it wisely!
Here are five ways you should consider utilizing bonus money before splurging on non-necessities:
Pay Down Debt
Whether you've scored enough extra cash to pay off an entire credit card or hardly enough to make a dent in your total debt - making a habit of tossing additional income straight towards your payments will get you closer to paying them off.
Boost Your Emergency Fund
If you're sitting okay in terms of debt or have been working hard at building an emergency fund, a bonus is a great way to kick-start or supplement that cushion. Trust us, you'll probably feel way better about having those funds at hand when you need to replace a tire or pay for an unexpected visit to the ER than if you had blown it all on a shoe-shopping spree!
Start a Special Savings Account
Haven't started saving for college, holiday shopping, or another specific, costly goal yet? Any amount of extra money you're handed is the perfect amount for getting one started! We highly recommend starting a totally separate account for these savings so you aren't tempted to transfer them into your checking account or dip into them when you don't really need them.
Been ignoring, skipping, or deferring payments on your monthly bills? If the answer is, "yes," then this should be the first way you use your bonus money. Overdue payments result in crazy fee and interest penalties - and can wreak havoc on your credit score. Dedicate your extra funds to getting your payments in a better place.
Invest in Your Future
It's never too early (or too late) to start saving for retirement - and any contribution helps! If you haven't already done so, start contributing to your employer's 401(k) or start up an IRA and dedicate any extra money you receive through work bonuses to your Golden Years.