The holiday bonus, it’s everybody’s favorite part of the year’s end. Forget the time off and the holiday Christmas party, it’s the end of year bonus that gets us up out of bed each day for the 50 or so weeks we work each year. We bust our tails at work, making our company tons of money, all with the hope that we’ll get to see a small portion of it at year’s end. Once they hand you that bonus paycheck, that’s when the real fun begins, when you get to spend it.
New clothes? Yes please. Trip down to Florida for a weekend because it’s way too cold where you live? Sounds like a plan. Taking your hot date out to that baller new restaurant? Done. You’re suddenly getting to live the high life, high on the hog. “Come on Ben, we’ve worked hard all year, and budgeted our money wisely. We deserve this bonus to just spend on our own, so don’t give us a lecture on spending our bonus”…is what many of you will probably say. Don’t get me wrong, we here at YoungMoneyFinance love spending money as much as y’all do. I’m actually writing this post while flying up to NYC for the weekend. Assuming I get a year end bonus, I’m certainly putting a decent chunk of it to the ‘fun’ section of my budget. If you’re anything like me though, you could always save just a little more or do something with your money more than spend it as fast as you can on something you’ll regret next week. Let’s explore a few ‘wise’ things you could do with part (notice I said ‘part’) of your bonus check:
1) Put aside some for the holidays. Christmas ain’t cheap. Going to all those holiday parties are not free. Buying all those gifts, paying for all those dinners with friends, going on that hay ride through the lights will definitely hit your budget. It’s harder to say ‘no’ to things this time of year, so putting a little extra money aside early on can help you say ‘yes’ without regretting it when your credit card bill comes.
2) Throw a little extra in your retirement. You can contribute some $17.5k to a 401(k) and $5.5k to a Roth IRA retirement plan each year. Are you near that limit? If not, consider adding a couple hundred dollars to your retirement. Check with your company or your retirement broker for the logistics of doing so. Your future retired self will thank you.
3) Get that emergency fund up to a more respectable level. Is your emergency fund’s balance up to 3-6 months of expenses? Rent, food, student loans, and gas all accounted for? If you lost your job or had a medical emergency, would you be ok? Help yourself sleep a little better in 2014 by having a well stocked emergency fund.
4) Stock some away in savings. I’m hoping to buy a house in 2014. Definitely a big step that will, to date, be the largest purchase I’ve ever made (my wife’s ring is big…but not that big!). We’re trying to put away as much money as we can before the time comes and a little extra never hurt my savings account, and I’m pretty sure it won’t hurt yours either.
5) Give it away. We’re so blessed. Most of us have a great job (if not, check out our article on getting a job), a roof over our heads, food in our bellies and even a little leftover to enjoy. Take some of your bonus and give it away to a charitable organization that could really make a difference with your donation.
The end of year bonus is a real treat. It’s a great little pile of cash that can really help you out. If you’re lucky enough to get one (my apologies if you don’t), be smart with it. Definitely go out and enjoy a large portion of it, but do try to set a smaller portion of it aside and do something smart with your money.
Personal Finances are certainly top of mind for many of us. If you're looking to get serious about improving your financial situation, we've got lots of great materials all over this site! Additionally, we realize that there's a lot of noise out there, and so we created PERSONAL FINANCIAL GUIDES focused on topics with all the info you need, and without any of the noise/ads/clickbait. 
