Cape Town – If you are one of the lucky ones who gets a December bonus, you will know how great the temptation is to splash out and spoil yourself.
While some splashing of a small part of the bonus is definitely in order – after all, you have worked hard for the money – there are ways of spending it that will actually give you peace of mind, improve your general financial situation and your quality of life in the coming year. And you cannot really put a price on those things.
So do your best to stay away from the temptation of Christmas special offers and Boxing Day sales, and consider some of the possibilities below.
Here are some ideas on how to spend the money that will definitely be to your advantage.
School fees and uniforms. If you have kids at school, they will be starting up before you get your January pay check. School uniforms don’t come cheap. Use the bonus, and buy what you need for them now. You will be immeasurably grateful in January. School fees can also be crippling, especially in the lean month of January. Pay them now and get it over with.
Pay off debt. The interest you pay on debt on credit cards and overdrafts is a real killer. Debt, especially if it is run up for living costs on a continuous basis, eats into your financial security. Sure, it’s not a romantic or exciting thing to do with your bonus, but reducing your debt is actually the best Christmas present you can give yourself. Being debt-free means all your money is your own.
A new mattress. You spend a third of your life in bed. A lumpy or worn out mattress doesn’t just affect your quality of sleep, it can give you very real back problems, which could end up costing you lots of money. Treat yourself to a decent mattress: you will be grateful for years to come.
Car service. It’s one of the things you know is coming, and it seldom comes cheap. But keeping your car in good nick and dealing with possible problems before they become massive issues, is definitely to your advantage – both financially, and in terms of your and your family’s safety. It’s nice to start the new year with this out of the way.
January’s accounts. At the beginning of January, all your normal payments are due. And if you have splurged wildly over Christmas, January can be a very thin month indeed. If you pay all your bills in advance, you know that at least all the basics are covered. Then you can possibly do something exciting with the money that is left over.
Rainy day fund. Open a separate low-cost savings account, and start a rainy day fund if you don’t already have one. This can be used for sudden medical expenses, a family crisis, fixing the car, paying an insurance excess – you get the picture. When you really need it, you will be so grateful it is there.
A home appliance. If your stove, washing machine, or fridge is on its last legs, use the money to buy a new one. Save yourself the cost of interest payments on instalments. These are things you use every day, and are worth spending money on.
The money market. Invest some money in this, and get some interest instead of paying interest. In a real crisis, you can access the funds reasonably quickly. Possibly also consider spending the money on seeing a good financial advisor.
A weekend away in February or March. It’s much cheaper than a whole holiday, and if you do your research well, there are some lovely self-catering cottages to be found in interesting places all over South Africa. The weather is also still fabulous then. If you use part of your bonus to book and pay now, you will have something pleasant to look forward to in the coming year (especially when you have to go back to work in January). Also if the accommodation is paid for now, it spreads the costs of the weekend over a few months.
Electricity and water. It might sound like an odd thing to spend a part of your bonus on, but a cash injection into your municipal account could save you sleepless nights later on in the year. Then there’s also pre-paid electricity. It’s nice to know that that is taken care of for a few months.
Home renovation project. Whether you’d like to replace the cracked tiles in the bathroom, fix a leak or put in a fireplace – the bonus can come in very handy. If the property is yours, any renovation you do improves your property, so it is also an investment. It is always difficult to finance this type of project out of your normal monthly salary.
A bit of a treat. You have to do something nice for yourself as well. You have worked hard for the money. Maybe a visit to the hairdresser, as trip to the theatre, a fishing trip, a night out with friends or family, or a nice new pair of shoes. You choose. You do deserve to be spoilt a little as well.
Article By Fin24.