Make This Year’s “Bonus Season” Different
November 24, 2008 – 6:05 pm
This is not the year to spend your holiday bonus. Many companies pay out annual bonuses toward the end of the year, and the problem becomes visible when people either plan on receiving this money or (even worse) they spend it in advance!
I’d even like to object to even naming your hopeful windfall a “bonus”. Let’s instead call it a “job search fund” or an “unemployment insurance fund.” It could also be a “401k Support Fund.”
Please don’t make the mistake of blowing your hard-earned bonus or gift on short-term purchases. I can’t even name most of the things I bought last year, so how important or long-lasting could they be? Instead use any extra funds that become available to improve your financial situation. If things continue to deteriorate in the job market the “bonus” that most people will get will range somewhere between a pink slip and a “keep up the good work” pep talk.
I’m just grateful to God I still have a job, and I’m also grateful that my firm’s bonuses are paid out in March rather than right before the holidays. I’m not one to splurge during the Christmas season much anyway, but I don’t need any additional temptations either. And after all I have crib(s), stroller(s), and a bunch of diapers to buy. [On a related note I’ve heard that “layaway” plans are now coming back into vogue as customers choose to buy things with cash. You can even put diapers on layaway at Baby Abode! I wonder if I get a discount because I’m having twins?]
If you’re like me you’ve probably heard of the following recommendations before, but have failed to act according. There are still a lot of us out there, including me, that need to make better decisions. After all, what did you do with your stimulus check? Or last year’s tax refund? Make a change for the better starting now.
I suppose it depends on the amount of your “unemployment insurance fund”, but some will receive $50 or $100 and others will receive 10-20% of their base salary. In either case please remember that even small amounts can make a difference. It’s also (unfortunately) easy to rationalize poor choices on both sides of this equation:
- “It’s only a crappy $25/$50/$100. I might as well just go out to a nice dinner and blow it all.”
- “I was blessed with a big bonus. Why not spend ½ of it on a new flat screen TV and save the rest? I’ll still be better off than the average person who isn’t able to save anything this year.”
Don’t give in to this type of thinking. It’s destructive and reckless for both you and the family you help support.
Consider these choices instead:
- Build up your emergency fund.
- Put it in a savings account and spend it (or maybe just the interest) next year.
- How’s your kid’s college fund doing?
- I’m not a big fan of this one, but save it and use it next year when you (probably) don’t get as big of an annual raise.
- News Flash: the market has tanked. If you have a fully-funded emergency fund (3-6months expenses) consider investing your bonus.
- Give some or all of it away. There are a lot of hungry people in the world, and probably in your neighborhood too. And anybody remember Hurricane Ike? It’s out of the news, but thousands of peoples still lost everything and are struggling to get by.
Image Credit: dbking
If You Liked This Post Then Please Check These Out...
|
2 Responses to “Make This Year’s “Bonus Season” Different”
Glad to read your article. Now i can more selective for spending my money.
By Hendro Iskandar on Nov 25, 2008