MILWAUKEE, November 17, 2022 (Newswire.com) - Employees who just received a bonus at work might be wondering how to spend (or save) it. Here are a few options to consider when deciding what to do with funds from a bonus payment:
1. Save it
A bonus is a great opportunity to pad a savings account or build out an emergency fund. Bonus recipients may also see this as a chance to sock the money away and start saving for something big; this could mean saving more for retirement or another long-term financial goal like a down payment on a house or a car.
2. Invest it
A bonus can also be an opportunity for savers to put more in their 401(k), IRA, or other retirement investments. Investors who have already maxed out their 401(k) contributions for the year or who just want to explore other avenues for investments may also want to invest the money outside of their retirement accounts. If investors are working with an advisor, the financial advisor may be able to assist in choosing stocks, bonds, mutual funds, or other assets.
3. Use it to pay down debt
A cash infusion can be a good occasion to pay off any outstanding debts. It may be enough to pay off the last of student loan debt or the rest of a car loan. People with high-interest debt, like credit card debt, can use their bonus to pay it down and save money on interest in the long run.
5. Make a down payment on a big purchase
A bonus could help someone reach a big financial goal they've been saving for. If a bonus is big enough, and the buyer will be able to consistently afford the monthly payments after the down payment, it could be a good time to make a down payment on a big purchase like a house or a car.
6. Take a vacation
Anyone who has been working hard and hasn't had a chance to take a break might see a bonus as a chance to fund a relaxing vacation. Whether this is a dream vacation or a quick weekend trip to somewhere local, this is an opportunity to take time to recharge and come back to work refreshed and ready to take on new challenges.
7. Engage in lifelong learning
One of the most important things anyone can do with a bonus is invest in themselves. This could mean using the bonus to pay for lifelong learning, such as classes, seminars, or conferences. Doing this can lead to learning new skills, staying up-to-date in an industry, and meeting new people. Plus, it's a great way to network.
Source: Northwestern Mutual