Tips for The Average Joe

How to Utilize Your Year-End Bonus for a Rainy Day

What could be more rewarding than the satisfaction that comes with knowing your efforts throughout the year have paid off and you have that highly coveted end-of-year bonus? Whatever percentage of cash that you get as a bonus on your monthly check, that is something you ought to plan accordingly on how best to utilize it. For some people, the year-end bonus is a great boost for retirement and emergency funds investment, and this can be a good choice for you as well as long as you choose the right investment plan. Here are some suggestions on what you can and cannot do with your year-end bonus.

For starters, you can decide to put the money into your 401(k) retirement plan. The beauty of this is the fact that it will always be showing up in your pay stub template showing how much you have put aside on the plan. Still on investments, how about you think of setting up a ROTH IRA retirement savings plan? You Can always get a website that will guide you on how you can have the 401(k) become secondary to the ROTH IRA) retirement savings plan. The other smart decision you can make with your salary bonus is to pay off some of the many debts you have accrued over the months. Ultimately, you will have an improved credit rating that will put you in better standing for future investment opportunities. You can also think of putting up the additional cash into an emergency fund account to cover those unforeseen eventualities such as loss of vehicle, job loss, medical emergency, etc.

On the flip side of the coin, you should never gamble with your year-end bonus. You have to work at ways through which you can build a lifestyle with better control over your odds and great returns for your hard-earned cash. That is why it is highly recommended that you read a lot here on retirement plans and savings for a rainy day. Year-end bonus is also not cash that you will use to buy electronics. You should know by now just how tricky it can get when the electronics start to depreciate in value.

You should avoid being extra generous during the holidays when the year-end bonus checks in. Don’t get me wrong here, it’s OK to be charitable and to give out gifts for Christmas, but try avoiding overdoing it and instead lead your normal life as if you didn’t have the cash in the first place. Find a website that has such details and get to go through the ideas, and you are sure to utilize it for a rainy day.