Use Your Bonus Wisely
It’s that time of year again where you spend a lot, but you hopefully receive a lot in return! Many employers give holiday or year-end bonuses as thank you for the hard work and dedication to the company throughout the year. Some people splurge while others slowly spend the money, but not everyone creates a spending plan. When you receive a bonus, consider some of these suggestions to stretch the cash.
Pay down debt. Most people have some type of debt. Some have protected debt—think mortgages or business loans. This kind of debt can allow us to build a home or start a legacy. However, consumer debt, such as credit cards, can be hurtful and avoidable. Consider using some of the bonus to pay off high-interest consumer debt. You’ll thank yourself down the line with a better credit score and more investment opportunities.
Contribute to Your Retirement Plan. You want a comfortable retirement, right? To do so, experts say you’ll need about one million saved. Yet, the average 65-year-old has less than $200,000 in their 401k. Don’t let this be you! Start contributing the maximum amount to potentially allow your account to grow larger for an unrestricted retirement. With growth potential, every contribution can make a difference.
Investing a portion of the bonus may help stretch the money. No matter the amount, there are vehicles to invest in at almost any budget. Consider micro-investing for smaller amounts. Want to contribute more? Do some research to ensure you’re choosing the right tool for your unique situation and goals. A financial consultant can help decide the best way to accomplish that.
Yes, you can splurge a little! Remember, it was given as recognition for your work and dedication throughout the year. Have you been eyeing something a bit out of budget? Now is the time to make the purchase— it’s typically better to buy an expensive item with money you have instead of a credit.
How you spend your bonus shouldn’t make or break your finances. The way you use your wages throughout the year have greater impact on your financial well-being. If you’re like most Americans and hope to retire one day, you’ll need a retirement financial plan. Whether you need a check-up or major surgery, getting a second opinion can be a lifesaver. At RGA, we offer complimentary second opinion strategy sessions and retirement plan check-ups. Want to know more? Click the link below, call 1-800-467-8152, or email firstname.lastname@example.org.
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