It's almost that time of year when over 80% of employers hand out bonuses according to a 2015 report by World at Work. So, what should do employees do with this year-end reward?
Bonus pay is part of a short-term retention policy to reward staff via thank you pay for achievements. It happens when employees hit sales goals, make their plan numbers, or bring in unprecedented results. Or, for some lucky folk it comes as a nice yearly gift from their bosses (like the Griswolds).
Spending is a Bonus
No matter what the size, big or small - my suggestion is to remember that this is not lotto money, its earned money. So, treat yourself within reason, but then make wise choices. For example, I typically splurge on things that are a step-up from my normal. Past purchases include a $80 mani/pedi, a $300 pair of boots, $400 statement lamp for my living room, a $500 package of laser hair removal, a $600 silent dishwasher, etc. Note, there is no $10k pool on the list (unlike the Griswolds).
Saving is a Must
Each of these frivolous splurges were memorable for me and gave my morale a fun boost, but then I made sensible choices with the remainder/bulk of my bonus moola - like paying off debt, saving for retirement, donating to charity, starting an emergency fund, investing, etc. Boring, maybe? Smart, yes!