What to Do With Your End-of-Year Bonus


Bonus time is like a visit from Santa for adults. It’s tempting to spend it right away—you earned it, after all! But before you run out and buy the most expensive thing you can think of, ask yourself one quick question:

“If you don’t plan for your future, who will?”

We here at Stash Wealth are all for using some of your bonus to #treatyoself. However, a bonus is also a chance to get ahead on your goals. Distribute this extra money wisely today, and you’ll put yourself in a much better position for the future.



Invest In Yourself First: Put 30% toward your future

It’s up to you how to want divvy up this amount. Everyone’s situation is unique, and what makes sense for one person may not be the best choice for someone else.

If you don’t have a complicated financial situation (if you do, we suggest working with a financial advisor!), here’s our general recommendation for allocating this 30%:


  • Top off your emergency fund (which should in a high-yield saving account at an online bank, such as CapitalOne360 or Ally). You should have 3 months worth of fixed expenses (rent, car payment, phone bill, etc.) set aside.
  • Pay off any credit card balances. Start with cards with the highest interest rates. Carrying a balance hurts your credit score, costs you money and is basically the surest way to never get rich.
  • Contribute to student loans. Make sure it goes toward the principal—you may have to call to ensure this happens.
  • Contribute to a near-term goal. This could be anything occurring in the next year or so, like an upcoming vacation, wedding or new addition to the family.
  • Contribute to retirement accounts. Assuming you’re maxing your 401(k) match, max out your Roth IRA next if you’re eligible. The easiest way to invest money in a Roth IRA without the help of a professional is to use a Target Date Fund that lines up with the year you plan to retire. Vanguard has a good selection.

Invest In Fun: Use 70% to treat yo’ self

When we say blow it, we mean it. Enjoy that money!

If you are using 30% of it too for things like saving and debt, you’re #adulting hard. You deserve to take a spontaneous trip, book reservations at Per Se, or buy that designer item you’ve had your eye on.

If the thought of blowing your money on something extravagant makes you nauseous, think about something else you want. Maybe it’s a new coach, a nicer apartment, or a car. Set aside some money for it in separate savings account specifically assigned that goal. Once you’ve taken this step, you can truly spend guilt-free.

Psst! This system works great for your tax refund, too!


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