What do you do when you get promoted with a raise or get a fun bonus check? Do you spend it? Pay something off? I asked a few friends and family members what they do with that extra money, here are there answers.
-With my promotion I increased my 401K by 1%, since I didn’t count that extra money in my budget, it wasn’t needed and it is needed in my retirement fund.
-Since were having a baby next year we bought all of the baby furntiure with my husband’s year end bonus.
-We fixed our car which was in need of repair, and bought a new computer since our other one was 6 years old.
-We are going to save it for a cruise.
-It is going to pay for Christmas since we went over board and I don’t want to pay that high interest rate on the card.
Everyone is different, we all want and or need different things. If you are in line to get a promotion, or are lucky and get a bonus once a year, its a good idea to decide before hand what you would like to do with that extra bit of money. Depending on how much you are going to get, it might not be a bad idea with promotion money to put it aside in your 401K, or a 529 Plan for your retirement. Another idea is to make an extra mortgage payment annually, and you’ll own your home a few years earlier, or put it aside in a rainy day fund.