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What to do with your bonus or tax return

IMG_5307It’s tax and bonus season, and if you are one of the lucky people who gets either of these things (or both!) I want to make sure you know how to handle that big check.

Before you get the check, you need to figure out how it will be allocated to different accounts or expenses. Most people know that they have a chunk of money coming to them before they receive it, so you should have time to plan.

If you haven’t taken the time to plan, it will just sit in your checking account. Thats bad! The higher bank balance will cause you to spend way more than you normally would.

Trust me.

Which brings me to my second tip. Get the money out of your checking account immediately! Or better yet, deposit it directly to a savings account.

We like how a big chunk of money makes us feel, and its always a blessing. But you want to put that money to work for you and your financial goals. Yes, its not super fun to sit down and plan how to use your bonus because you might find that its gone in a flash. But its even more depressing to see it wasted on mindless spending.

But I’m not all doom and gloom here.

I do think you should enjoy some of your bonus or tax return. Maybe you set aside 10% for fun, or shopping. But make sure you get the rest allocated towards paying off debt, building an emergency fund or other financial goals.

The long term security and satisfaction you get from putting your money to work for you is ultimately the greatest reward.

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