For some of us who are gainfully employed and paid biweekly, it’s a three-paycheck month instead of the usual two. Others of us here in the US might be expecting an income tax refund soon. Hopefully, all of us have had the experience of a little income that we didn’t plan for as part of our regular monthly budget. It’s a great bump that feels good whether we have a lot of money or not so much, because it can give us a little breathing room when it comes to maintaining and upgrading how we live. Money can’t buy happiness, but financial security means having a place to live, food to eat, and clothes to wear, not to mention maybe a few fun things to feed our spirits and souls. So if you’re getting a bonus cash infusion soon, or even if you aren’t but are hopeful someday, what will you do with it so that it doesn’t go to waste? Here are some ideas:
Almost all of us have some form of debt. Depending on what it’s for, how much you owe, and what the interest rates are, it may be worthwhile to pay off as much as you can or just make a single extra payment on it so that it will go away that much sooner. In general, short-term loans or credit cards at high interest rates are the best candidates to repay as soon as you can because of how much they can cost you over time. Check your loan terms to make sure putting more money in now will mean you will be out less money in the long run, as some loans may charge prepayment penalties or make you responsible for all of the interest that would accrue with the planned payment schedule, but otherwise, you’ll end up ahead by paying even small additional amounts now.
Only the luckiest of us can buy whatever we want, whenever we want it. The rest of us have to plan our spending and save up for big-ticket items. You could include vacations here, or buying special clothing pieces or a home appliance or equipment for your favorite hobby. It’s very often smarter than running up a credit card or otherwise going into debt, but it does require discipline and waiting until a time like this, when you have some more money on hand than usual. You might also be thinking about annual or semi-annual expenses like insurance or tuition payments that are predictable but not entirely part of your normal budgeting, and rely on knowing that you will get that reliable third monthly paycheck a few times a year. Even if you’ve been putting a little away regularly, having some extra will get you closer to your goal faster.
Savings are occasionally referred to as a way of paying your future self. Even if you don’t have something in particular you’re saving for, needs and wants can come up unexpectedly. A little padding in your checking account or a formal emergency fund can make all the difference when your car decides to break down in the same month some other bills are higher than normal or you are surprised with the opportunity to pick up a dream collectible or go on an impromptu getaway. Don’t forget to think about longer-term savings too, like retirement accounts. They might be less easy to access today but will grow more for when you need them in the future. It might not be next month or next year, but there will be a time when having some money saved up will prop open a door that will make your life far more pleasant than it might otherwise be.
Not all savings need or should be in cash dollars though, especially these days with rapidly rising costs and supply chain challenges. Putting extra money into extra groceries that can be stored long-term will help you spend less later, for example. They don’t have to be “survival” foods either; you can also go a little deeper in your regular less-perishable food stores and continue rotating through them as you normally would. In addition to food, consider whether you also need to grab spare parts, household goods, and emergency supplies. There are also some of those things you may not be able to get at all in the future, making it more important to stock up now. Preppers can get a bad rap sometimes, but they weren’t the ones frantically searching out toilet paper a few years ago when it could hardly be bought for love or money. Makes it seem like following their example might not be such a bad idea, doesn’t it?
Finally, don’t forget to carve out a little bit to spoil yourself with. No matter how urgent that extra money is for necessities, find a few dollars for something silly, something enjoyable, something that is just for making you smile. It can be as small as splurging on a fancy coffee drink on Monday morning or picking up a luxury body wash – on sale! – to enjoy over the next few months. Whatever it is, make it something that’s outside of your normal self-care. Getting a bonus is a special occasion even if it’s not a surprise, and it should be treated accordingly. Spending part of it on a small reward for yourself won’t have a major negative effect on more pressing needs, and will keep you from getting burned out on only paying debt and saving for someday.