If you have already or will soon be receiving a bonus from your employer, have you given some thought as to what you plan to do with it? Many employers provide bonuses around Christmastime to show appreciation for their employee’s hard work throughout the year. If you benefit from receiving a bonus, it is important that you do some thinking before deciding what to do with this extra cash.
Are you already saving enough to attain your retirement goals? If not, consider putting some of your bonus into an RRSP. You may even have the option to have the bonus go directly into an RRSP so that you are not subject to the taxes right now.
Do you already have funds set aside in case of emergencies? If not, consider putting some or all of your bonus into a special account designated for emergencies. It is a good idea to have at least three months worth of living expenses tucked away just in case something unexpected happens that prevents you from earning income.
Do you have plans to buy a home or a vehicle or go on a trip? If so, determine whether or not you already have adequate savings for this goal. If not, you may want to use part or all of your bonus for this.
Just because this is extra money, it doesn’t mean you shouldn’t treat it the same way you would treat your regular earned income. Make sure that you put it towards the goals that are important to you, and then you can freely spend whatever is left over above and beyond those savings goals. By carefully deciding how to use your bonus you will ensure that you will meet your savings goals and have some fun, too.
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