What not to do with your Bonus.
Spend it before you get it:
One of the worst mistakes you can make is to spend your bonus before it actually lands in your bank account. Wait for written confirmation from your employer on the exact amount of your bonus before taking any action.
Forget that it is taxable:
Your bonus is subject to tax at your normal tax rate, so be sure to know what the net value of your bonus is before spending it.
Fall victim to mental accounting:
Mental accounting is a behavioral bias where we compartmentalize money without seeing the whole financial picture. Do not think of your bonus as a financial ‘windfall’.
Forget about Janu-worry:
If you are paid mid-December, which is something many employers do over the festive season, bear in mind that your next paycheque might be 6 weeks away. Do not put your head in the sand and avoid thinking about January’s financial commitments. Prepare a realistic festive season budget and commit yourself to it.
We can help.