February is the time of year when my full-time employer pays out our performance bonuses from the year before. Because it takes a couple of weeks before our company’s end of year data can be analyzed and bonuses can be calculated, we don’t see our 2014 bonus money until February 2015.
But I’m definitely not complaining as I know a lot of companies don’t give bonuses at all. But even if you don’t get a bonus, or it’s given at another time of year, tax return season is also upon us and you might be receiving a lump sum of cash from that instead.
Being a very Type-A personality, I like to plan way ahead of time to decide what I’ll do with my annual bonus money. This is not to say that I spend it before I’ve gotten it, that would definitely be a mistake since you should never count you chickens before they’ve hatched! But I do like to have basic plan in mind so I can use my money mindfully on things I truly need or want and to help me make progress toward my true life goals.
With that in mind, here a couple of things I’d NEVER spend my bonus money on.
Things that Will Continue to Cost
A former co-worker of mine decided she really wanted a designer cat. Seeing as how we live in rural Kansas, she bought the cat without actually seeing it person or meeting the breeder.
The cat had to be flown across the country and picked up the airport 3 hours from our hometown. After all those costs were added up, the cat cost her almost $1,500!
Now if designer cats are your thing and you can afford to have one, that’s great. But my co-worker couldn’t really afford it. She used her bonus to pay for the cat without taking into account the fact that it will continue to cost her money every month for the rest of its life.
She didn’t account for this in her monthly budget and was already short on cash to pay for her lifestyle prior to becoming a cat owner.
Things that Are a Total Waste of Money
When I plan out how to spend my bonus, I usually end up putting most of it toward home repairs, maintenance, and upgrades.
These are all things that will benefit me in the long run and hopefully I’ll see a return on my investment if I ever sell my house. But that doesn’t mean I don’t use some of my bonus money on fun things or splurges because I do. When I get ready to buy my splurge items, I really consider my purchases first. The last thing I’d want to have happen is that I splurged on something and decided just a few weeks later that I don’t like it, don’t want it, or don’t find it as useful as I’d hoped.
Whenever you get a lump sum of money, be sure to consider all of your options before you spend any of it. Using a portion of it for fun things you wouldn’t normally treat yourself too is fine, but you should still make sensible decisions.
What would you use bonus money for?