The end of the year looms around the corner. Along with festive music and sugar cookies, for some lucky people the holiday bonus is an end-of-year staple.
Bonuses are often spent before they are received as employees anticipate payment.
With every indication that South Africans are feeling the credit crunch, however, this year may be a good one to practice bonus restraint.
Since this is the season of giving, your first temptation will undoubtedly be to give yourself a little something. We all deserve some spoiling, particularly when we have worked hard during the year. But wouldn’t it be more sensible and create more value if you use your bonus to pay off debt and to save a little nest egg before you spoil yourself?
Start by paying off the most expensive debt first such as your credit cards and shop cards that charge the highest interest rates. Also consider keeping some money from your bonus cheque for the holiday period, as this is generally an expensive time of the year.
Using a debit card for purchases instead of a credit card will ensure that you don’t spend money that you don’t have.
These days you simply have to re-assess your priorities. Importantly, you should not lose sight of vital aspects such as making provision for retirement; healthcare needs, saving for your children’s education and protection against the financial impact of catastrophic health events.
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