What to do with your work bonus? Go nuts. Seriously. Take 30% for things like an emergency fund, paying off credit card balances/student loans, save for a near-term goal like a vacation, and save for retirement. The rest? Funvest. Take a spontaneous vacation, buy that new sectional, or upgrade your wheels.
Alright, bonus time, the adult version of a visit from Santa – you’ve earned it, right? Before you go all out, smashing that splurge button, be sure to ask yourself one question:
“If you don’t plan for your future, who will?”
Now, at ARC Wealth, we’re all about that #treatyoself life with some bonus bucks. But, my friend, a bonus is like a power play opportunity. Spend it wisely now, and you’ll be on the scoreboard for the rest of the game.
THE BEST WAY TO INVEST YOUR BONUS CHECK
Invest In Yourself First: Put 30% toward your future.
Look, everyone’s got their own playbook, and your financial situation is unique. Just remember, you’re not alone in this (and if you are, get a financial coach, seriously). Here’s our game plan for that 30%:
Top off your emergency fund: Three months’ worth of fixed expenses – rent, car payment, phone bill – stashed away in a high-yield savings account.
Pay off any credit card balances: Tackle the high-interest ones first. Carrying that balance is like fumbling in the red zone – hurts your score, costs you money, and won’t get you to the championship. Check out our article on how to pay off credit cards.
Contribute to student loans: Straight to the principal – you may have to call to make sure it happens.
Contribute to a near-term goal: Upcoming vacation, wedding, or a new addition to the family. Whatever is on your list of goals.
Contribute to retirement accounts: Maxed that RRSP match? Hit up your personal RRSP. The easiest way to invest without a professional is a Target Date Fund that aligns with the year you intend to retire.
FUNVEST: USE 70% TO TREAT YO’ SELF
Now, when we say blow it, we mean it – enjoy that victory lap! Don’t worry about lifestyle creep.. You’re #adulting hard with that 30%, so let loose. Spontaneous trip, reservations at L’Abattoir, that designer item winking at you – it’s your time. If the idea of splurging makes you jittery, score a goal in a different area – a new couch, a swankier apartment, or an upgrade on wheels. Have separate savings accounts for these goals, and you’re on the fast track to guilt-free spending.
For more financial playbook gems, check out our savvy articles here.