Should you save or splurge that bonus check?

December 21, 2016

With the end of the year comes those bonus checks landing in your mailbox or bank accounts. Nothing beats a little extra money, especially during the holiday season. Nearly 80% of employers handed out bonuses at the end of 2015, according to a holiday bonus survey by consulting firm Challenger, Gray and Christmas.

No matter the size of your bonus, you want to make smart choices of how you spend that money. You earned this money after all. So how should you spend or save it? We recommend saving it if:


  1. You don’t have an emergency fund. The goal is to have 6-12 months of income set aside in a money market account in the event of an emergency.

  2. You haven’t maxed out your retirement accounts. Use this extra bonus check to max out your 401(k) or IRA.

  3. You are in debt. Putting the check toward debt is technically spending but it is also saving you by reducing your interest payments.


If you do not fall into any of those categories, you should feel free to splurge a little once all your bills are covered and you have money set aside for your retirement. However, don’t throw the money away on something just because you have it.

Another thing to consider is splitting the bonus check into thirds, one to save, one to spend and one to share by giving to a charity. It is the time for giving but make sure that you are making smart decisions and keeping within your budget this holiday season.

To meet with one of our Wealth Advisors to set up an investment account, please contact us at 763-231-9510.


The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nicole Middendorf and not necessarily those of Raymond James.

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