Savoring Your Bonus Is Not Erroneous

In the words of Vince Vaughn in one of my favorite movies Wedding Crashers:

ERRONEOUS! Erroneous…erroneous on both counts!”

But what I’m really trying to say with the help of Vince Vaughn’s words is:


So you just got a bonus….

$$ CHA-CHING $$

Maybe it was even a day after pay-day…

$$$ CHA-CHING, CHA-CHING $$$

And you’re thinking you could potentially…

Make it rain.

I remember receiving my first bonus. Do you remember receiving yours? The anticipation welling up inside me, my mind screaming “More money!!!” The very day it was deposited into my account, you know what I did? I booked a round-trip flight for a vacation without even thinking about the cost (it was about $400 dollars if I recall correctly). That first bonus that was completely unplanned, why not spend it right away?! Receiving that unforeseen cash flow felt like racking up all those coins in the bonus round when I used to play Sonic the Hedgehog on Segaaaaaa Genesis.

This was before I really knew what was up in regards to personal finance…I could even admit that I’m fairly sure my checking account was only in the double-digit range. I had no emergency savings set aside. I spent that bonus in an absolute flash. At this point in my life, I just relied on my bi-weekly paycheck to cover everything. Even if that meant almost dangerously zeroing out my accounts. I was that college grad who did not have the mindset to even recognize the importance of saving. I mean, how do you handle large lump sumps of cash being deposited into your account when you start a real world job?! Boy, have a come a long way in the last 3 years.

So hold up, wait a minute. Let’s just put a little thought into this bonus of yours that you’re about to receive. Let’s explore some other options that you have, instead of just spending cash money.

Let’s reverse the mindset: instead of figuring out how you’re going to spend your bonus, what are some ways that you can savor it?

Here’s a mighty fine list of things you could do with that extra bonus income:

  • Beef up your emergency fund

  • Contribute to your 401(k)/IRA

  • Add to a savings goal

  • Pay down debt

  • Make a contribution/money donation

  • Invest

The following isn’t a limited list, but it gives an overarching idea of how you can wisely put that money to work. All these listed? Yeah, they’re not erroneous by any means when it comes to feeling empowered by your money. Try not to mindlessly spend your bonus (or even count on that bonus coming to cover your actual monthly obligations). That’s when you potentially find yourself getting into financial trouble.

In the pursuit of strengthening your financial game plan, one thing certainly starts to become clear. The amount of money that you take home per month starts to become more than you really need in order to cover your everyday expenses & bills. You start to realize that the next time you get paid, there’s way more in your account because you’re not spending all your money, money in every which way possible.

You’ve become a saver. You responsibly account for necessary big ticket items, trips, and future endeavors (i.e. retirement, building up net worth). When you take control of your finances, a bonus is like an unplanned enhancement towards driving down your debt, contributing to a cause, or paying your future self. The decision is yours whether you want to spend it in a jiffy, or put it towards something that may have a more lasting effect on your life.

So tell me, what do you do with your bonuses? Are you tempted to spend that unexpected cash? What’s the most extreme thing you’ve ever done with a bonus?

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19 thoughts on “Savoring Your Bonus Is Not Erroneous

  1. I love this approach. The company I currently work for has a quarterly profit sharing program that I’m a part of. Every quarter when we received our bonus, I began putting the money towards my student loan payments, greatly increasing the rate I was paying them off. Now that they are gone, it is time to start moving on to retirement accounts and taxable investments with these funds.

    Liked by 1 person

    1. That is so great, and congratulations on paying off your student loans completely!! 🙂 That approach on how you utilize your quarterly bonus is incredibly intelligent. Does your employer by chance offer an automatic deposit of your bonus to your retirement account? Or is your retirement account separate from your employer?

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  2. Since my wife and I come up with a monthly budget in the beginning of the month and stick to it pretty well, anything extra goes towards the future. It could be general savings, increasing retirement, investing, or our daughter’s college fund, a vacation, to name a few things.

    If it’s a big windfall we might go out to a nice dinner or buy ourselves a treat, but we’re pretty good at saving. We’re pretty content and don’t really care about getting more “Stuff”.

    Liked by 1 person

    1. Vic,

      This is excellent! Having the extra money go towards the future makes it seem like saving isn’t even a chore. It’s also great that you’re content with not getting more things. Currently, my fiancé & I are getting to move and were having a garage sale. It definitely puts into perspective what you already have, and what you can get by without!

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  3. Another idea is to start an account for a specific luxury, like having a nice meal out. Let’s say you got a $3000 bonus and you invest it in an index mutual fund. Each year, you could then take 5% of the mutual fund out (probably around $150 the first year) and have a special meal. As you add to it and it grows, you could increase how much you take out. After a few years, you might have a nice meal out a quarter, then once a month. You could do the same thing with a vacation fund or a home decorating fund. The beauty of it is that the mutual fund will replenish itself. That way you get to enjoy your bonus forever.

    Liked by 1 person

    1. This is a fantastic idea! I love that you can make this work to always enjoy your bonus. I think I’m going to start setting this up! I would make it an interchangeable category to spend on those specific things. Thanks for this great idea!!

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  4. I always try to save my bonuses. They’re usually pretty small because of my industry, so I try to pretend that they don’t exist at all and just go about my normal spending routine, letting the bonus fall into savings. Sometimes, if I get a particularly big windfall, I’ll portion out 5 or 10% for spending.

    Liked by 1 person

    1. Using the doesn’t exist at all tactic is great! I like to think of them as a bonus to beef up my savings, not just spending. 🙂 When its larger, it’s always a great idea to allow some wiggle room for spending to not be too strict!

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  5. Don’t beat yourself up about blowing that first bonus — think of it as “getting it out of your system.” You still got yourself on track financially pretty darn fast! And what great advice moving forward. Certainly for folks who are barely earning enough to save, there’s great temptation to spend a bonus and, honestly, we’d say it’s okay to have a little fun with bonus money as long as you’re on a good path financially. Then, over time, as your income goes up, you can start to save bonuses in their entirety. But that should be an aspirational goal, not a hard and fast rule. 🙂

    Liked by 1 person

    1. That’s a great way of putting it! Every now and again “getting it out of your system” should be excused. It’s when it occurs too much, it can be a problem lol! Yes, definitely an aspiration. In the beginning stages if it’s all too much, saving all at once that temptation to splurge may creep up easier. When you’re on a great path financially, it’s fun to allocate your bonus to all those goals!

      Liked by 1 person

  6. We typically dump most straight in to savings.

    I do think that bonus time is a great moment to occasionally reward yourself though. We often budget a vacation or some purchase for the house that we’ve wanted out of at least a portion.

    Liked by 1 person

    1. That’s a great plan! Using a portion of your bonus to reward yourself in some way is great. It’s when you fall into the pattern of relying on the whole bonus to take care of fixed expenses where it gets tricky. If your bonus leaves that extra cushion & room, I think it’s a great time to use it on something you’ve been planning for!

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  7. I used to be someone who spent my bonuses pretty much before they were even paid. I would ramp up my credit card bill and then pay it down with the bonus so I never really had time to savor. Now I understand the importance of savor and I typically allocate a small portion to spending so that I don’t get saver’s fatigue and then savor the rest for other life goals.

    Liked by 1 person

    1. Even though you may have not been saving in the beginning, it’s great that you were still paying off your credit card! I also think using bonuses towards driving down debt is a great use for it too. That’s an excellent balance! Savers fatigue can definitely strike if not tended to. 🙂

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  8. Yep, my bonus goes to beef up the emergency fund or savings. The deal is that we can spend a small portion on something fun. It’s supposed to be 10%, but I’m not comfortable spending even that much. So we enjoy the bonus, while still reaping the rewards of having peace of mind.

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  9. When I was working, I used to love to take a small percentage of my bonus to buy a luxury item like a great purse or new shoes and then put the rest into my retirement savings. As I got older, I found it even more fun to just put the whole thing into retirement savings…that’s when I knew I was getting old! haha!

    Liked by 1 person

    1. This was a great share!! I completely relate with the recognizing you’re getting old when saving is one of your favorite things. 🙂 From time to time it’s still a good thing to use a small portion for reward or a pre-planned purchase. But saving all of it feels great too!

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