Receiving a holiday bonus at work is a welcomed end-of-the-year present – and using it wisely can have a lasting impact on your overall financial well-being. Here are some money-smart ways to make the most of your work bonus this year.
5 ways to spend (or save) your holiday bonus
1. Pad your emergency fund
Consider allocating a portion of your bonus to your emergency fund. Having a robust emergency fund provides financial security and peace of mind. Experts often recommend saving three to six months' worth of living expenses. If your emergency fund is not yet fully funded, using your work bonus toward this is a prudent move.
2. Pay down debt
If you have outstanding high-interest debt, such as credit card balances or personal loans, consider using part of your bonus to pay it down. Reducing debt not only saves on interest payments but also improves your overall financial health.
3. Invest for the future
Put a portion of your bonus toward long-term financial goals by investing. Whether through a retirement account, such as a 401(k) or an Individual Retirement Account (IRA), or other investment vehicles, investing can help your money grow over time. Consult with a CFS Financial Advisor* to determine an investment strategy based on your goals and risk tolerance.
Looking for an account with growth potential for non-retirement savings? Consider opening and funding a Thrive Money Market Account1 with General Electric Credit Union (GECU). Earn off your balance at a competitive rate while maintaining access to your funds for everyday or unplanned expenses.
4. Education and skill enhancement
Invest in yourself by using the bonus for educational purposes. This could mean taking a course, attending a workshop, or obtaining a certification that enhances your skills and marketability. This could potentially lead to career advancement and increased earning potential.
5. Home improvement with returns
Consider home improvements that add value to your property. Upgrading a home appliance, replacing a bathroom vanity, or enhancing curb appeal can increase the resale value of your home. This type of investment not only improves your living space but can also be a strategic financial move.
The key to making the most of a holiday bonus is a thoughtful and intentional approach. By considering a mix of short-term needs, long-term goals, and personal enjoyment, you can use your bonus to create a positive impact on your financial situation. Brainstorm a plan for the funds, then turn to GECU for interest-earning checking accounts, savings accounts, and certificates that help you turn a one-time deposit into earnings!