3 Better Ways to Spend Your Bonus

Many jobs offer bonuses at the end of the year for stellar performance. Some even offer bonuses for just about any performance.

It is most people’s natural reaction to immediately start thinking of different ways to spend that bonus check. Vacations, new TVs, or even new cars are all ways many people tend to spend their bonuses.

However, there are much better things to be done with a bonus then simply purchase an item that you may not even like in a year. These things require a long-term vision but can yield much more than a new TV when done properly. So without further ado, here are five better uses for your bonus.


It is no secret that saving for retirement is not sexy. Who wants to take something now and put it somewhere where it cannot be touched for decades? Let’s examine the numbers of such a decision, however.

Let’s say you are 30 years old when you receive your first bonus, and that the bonus is $1,000. This is a pretty typical amount, and nothing special.

Instead of buying a nice new 4k television, you choose to put that into a mutual fund or index that averages 7 percent interest each year. This is an average return for the stock market, and nothing special. You leave the money in the account until you turn 65. At this point your $1,000 investment is more than $10,000. Instead of buying a TV, you can now afford a decent vehicle.

If the markets fare slightly better during the 35-year period and you average a 9 percent return then you would be looking at $20,000.

If that still doesn’t sound sexy, let’s examine a scenario where you retire at 55, ten years earlier than the standard 65. You are young and spry enough to still travel and see the world. You go to all the sites you have seen in pictures your whole life.

Millions of people do this every year. If this appeals to you do a little research on how much money you will need to retire early and live your dreams.  Your single bonus check will probably not be enough, but perhaps all of your bonus checks for 20 years will be enough to send you into retirement at the young age of 55.

Invest in yourself

One thing that many successful people have in common is that they invest in themselves. There are dozens of ways that one can do this.

The simplest way would be purchasing something like a self-help book. A much more beneficial thing to purchase would perhaps be an online class, or attendance to a real estate seminar. There are plenty of websites that offer great courses for steep discounts.

Learning a new skill now can have huge repercussions in future wages and advancement. With the world changing so quickly, having a college degree is simply not enough anymore. Real world experience and class taught by those with that experience are the way to go.

Pay off debt

Perhaps even less sexy than investing in retirement is paying off debt. Most people have some debt in the U.S., and many people have excessive debt. Credit card companies do all they can to not show you how much you are spending on interest each month, but if you have credit cards, there is a good chance you are paying a good chunk of income to interest each month. This is especially true if you are carrying over a balance each month.

If you have credit card debt then one of the best things you could do with your bonus is pay off that debt. Stop wasting some of your paycheck each month on paying interest. It will be worth it just a month down the road when your first check comes and you suddenly realize you have $50 more than you expected because your interest expense went down.

These are just three smart things you could be doing with your bonus. There are dozens of others. Try to spend bonuses on advancing your life in the long run, not just for a week, or a few months. Someday you will be glad you were able to do so.

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