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How to Utilize Your Year-End Bonus for a Rainy Day
What could be more rewarding than the satisfaction that comes with knowing your efforts throughout the year have paid off and you have that highly coveted end-of-year bonus? Even so, unless you are smart enough in the choices that you make with your year-end bonus, you may end up in more financial trouble than before. You can decide to re-invest the cash as most people do. Continue reading to discover ways through which you can utilize your bonus and have it working for you on a rainy day.
Most people with fewer expenses to think about will throw in their salary bonus into their 401(k) retirement plan. The beauty of this is the fact that it will always be showing up in your pay stub template showing how much you have put aside on the plan. The other alternative when it comes to retirement is to look at the 401(K) retirement savings plan. You Can always get a website that will guide you on how you can have the 401(k) become secondary to the ROTH IRA) retirement savings plan. You can also use your salary bonus to clear some debt accounts that are giving you sleepless nights. Ultimately, you will have an improved credit rating that will put you in better standing for future investment opportunities. You can also think of putting up the additional cash into an emergency fund account to cover those unforeseen eventualities such as loss of vehicle, job loss, medical emergency, etc.
On the flip side of the coin, you should never gamble with your year-end bonus. The best approach to avoid costly mistakes is to look at ways through which you can create a sustainable lifestyle and take charge of your life with whatever you have. That is why it is highly recommended that you read a lot here on retirement plans and savings for a rainy day. Year-end bonus is also not cash that you will use to buy electronics. Of course, the rate of depreciation of electronics is pretty high meaning you will end up losing a lot within a few months.
Be wise when the year-end bonus comes in, and you are tempted to be extra generous with gifts for the holidays. Don’t get me wrong here, it’s OK to be charitable and to give out gifts for Christmas, but try avoiding overdoing it and instead lead your normal life as if you didn’t have the cash in the first place. Find a website that has such details and get to go through the ideas, and you are sure to utilize it for a rainy day.