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Seven ways to spend your bonus wisely

Planning ahead on how to spend your bonus is essential if you want to make the most of it. Here are seven tips on how to spend your bonus wisely. 

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It's that time of the year again where many employees will be getting their bonuses. Whether you will be using the money to travel the world, spoil your loved ones, or even just to buy those things you've been dying to have, make sure you use your bonus wisely. 

Let's guide you on how you can be savvy with your bonus money: 

- Pay off small debts

It's amazing how much money you can save on interest by just paying off your debts. Even if you can't pay off all of them, the little extra that you pay will save you some interest, which you can spend on something else in future. Look at paying debts that have the highest interest rate, e.g overdraft or your credit card.

- Pay your mortgage

One of the best places to invest your money is in property, but property remains a liability if you still owe on it, and will only become an asset once you have paid it off. This is why it's important to try as much as you can to pay off your mortgage as soon as you can so you can start making money from it. So take most of your bonus and pay towards your mortgage - and do so every year. 

- Pay your car instalment

Paying a couple of thousand Rand extra for your car loan can cut down your installments by a month or more. This is because that couple of thousand will cut down your interest rate, which can take a huge chunk off the monthly installments that you pay for your car. So if you are looking at paying off your car sooner, put some of your bonus money into the car loan.  

- Pay your child's school fees

Imagine the peace you will have knowing that you have paid or budgeted for your child's school fees for the upcoming months?! Some schools will even offer you a discount if you pay all at once. You can use the money you were going to budget for school fees to reward your child in the new year for each time they get good marks. 

- Improve your house

Look at little improvements that you can do to your house that could increase the value of it. For instance, put in new wall units or insert burglar doors. These are lifetime investments for your house.

- Save for an emergency

Emergencies can end up taking up so much money from your salary or even causing you to take on new debt if you haven't planned for them. This is why it's advisable to put aside money from your salary for emergencies. So just in case you don't have any money saved up for emergencies, or you don't have enough allowance on your salary to put aside for emergencies, use a portion of your bonus money for emergencies that may arise in the new year. 

- Spoil yourself... but on a budget

Of course you have to leave some money to reward yourself for all the hard work you put in during the year. If you have been dying to buy that pair of shoes, go ahead and buy it. Just make sure you don't spend half the money on buying things like take aways or spoiling everyone else in your family with things that aren't necessarily needed. 

Also read: Seven tips for using ATMs safely this festive season

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