If you or DH get a substantial annual bonus

[4speedy]

I am mainly curious as to how people allocate their funds when they get a large bonus in a lump sum, not regular monthly bonuses.

So far, we have always had to put it toward debt and major home renovations. DH has only been in the serious bonus range for about 3 years so after this year, we should have all the major renovations done to our home and be debt free. Next year I would like to put large lump sums into each kid's college fund to really kick start them. After that, I have no clue what we'll do. We've always had things we've HAD to use the money for so it's not easy for me to think about more frivolous spending. how much do you put toward the "wise" choices and how much do you allow for fun money?

[Deleted]

in years past my boyfriend's bonus has gone directly into savings. next year I hope we'll invest the entire sum.

[w2w]

Most goes into savings/ investments, including our child's 529. We usually take a few thousand and do something frivolous with it.

[Deleted]

This year buy company stock (privately held) with it, pay off Christmas expenses & minor home improvements. Last year used the entire thing to buy company stock which is the reason the bonus is doubled this year (stockholders get extra bonus based on shares they own & they've done we'll this year). Prior years used for debt &/or home improvements.

[heygrey]

i was coming in here all "yeah! h gets an awesome bonus!" but it's hardly on your scale, haha. it's way, way better than his first job though where he got $50 and was told to get back to work.

he usually gets ~$1000 around christmas. we each take $100 and then the rest goes to savings or debt or whatever goal we might have at the moment. that's how we generally handle unexpected money over $50. we each get 10% and then the rest is made useful in our budget. we like to pad our fun a little bit without hindering long term progress.

[Deleted]

Mostly they go towards savings now. In the past we used them to pay off debt (SLs, mortgage, etc). This year if he gets a nice bonus he's been talking about buying a car. I'm not exactly thrilled about that (personally I think expensive cars are a waste of money) but I don't feel like I can really tell him no. I'm hoping he just forgets about it, lol.

[WOT?*]

H is a Special Snowflake because his bonus varies depending on hours, performance, how much the honchos know and like him. We're crossing fingers we cross the threshhold this year into a third-tier based on his promotion, performance and lack of pay raise accompanying the promotion. He's not holding his breath because he's not made his hours, but I'm crossing fingers because while he hasn't made his hours, his admin hours are appallingly high based on performance of the prior managing plus other things that have gone wrong. And he's only a couple hundred under his goal (which was made before he was promoted.)

Usually we pay off a bill, bank a chunk and use a chunk for a trip. This year will be different because we have the kiddos so we'll have to determine how it will be spent since they have school and we need permission to take them out of state.

[kadams767]

In the past, we've used them to finish funding our IRAs, pay down student loans, and towards down payments on our house and a new car. Currently, they are mostly going into savings and investments. We usually spend a few hundred on something fun and frivolous first though.

[Balki.Bartokomous]

We are responsible and save most of it. We take a couple hundred each for fun money, and then we put the rest in savings/investments. This year, though, we might take a few grand & redo our kitchen counters. DH does not yet know this, lol.

[limey]

I've done a lot of different things with them over the years, including saving toward a down payment, saving toward a new car fund, paying extra on my mortgage (when interest rates were 6.5% and I had no SL or CC debt), general retirements and vacation/splurges.

[chessie]

Normally we discuss what will either of our bonuses will go, we don't do fun money though. We send it over to savings then divvy it up later where we would like to spend it. This year probably be a new bathroom.

[Deleted]

Ours would be split between maxing roths and saving
Got upgrades.

[Deleted]

Treat yourself to something nice, and the rest goes into savings/investments like everything else.

[anaps28]

H gets a substantial bonus and it usually pays off some debt racked up from holidays,last year we paid off one of our cars. A portion always gets saved. Only once did I have a significant bonus and it went to our closing costs from our condo and home renovations.

[bazealina]

Mine is a Special Snowfake..owning an "s" corp means that my distribution is entirely related to the profits of the company which I own with my sisters. We find out wednesday about this. However, out of our distrbution we have to pay the taxes for the whole company. Looks like the 30+% tax bracket for us this year...
That being said we are looking into saving 50% of the remainder and using the rest as a down payment on a new house. The profits/equity from this house will go to new furniture..

ETA: terrible typos sorry

[Deleted]

This year, we are maxing IRAs, putting some aside for taxes, and the rest to house downpayment fund.

[zeewifeandmama]

Two years ago we paid off our car, and last year we paid off the second on the house, paid off our cc, and put money away for the hospital bills we were incurring this year. This years bonus will likely go more into the kids' savings accounts and for a trips both in June and aug.

[ellipses84]

Debt, Home Reno and e-fund.

[drloretta]

Usually debt payoff and house stuff. In good years we've gotten some fun $ out of it.

[hbomdiggity]

Previous years we used some as fun money (vacation, watches) as well as put it in the house DP fund.

This year it will be paying for the garage reno and putting the remainder into a larger house reno savings fund.

[mellymel]

This year will be a sucky year compared to my normal bonus payout. Anyway, it will go to savings to help cover the unpaid part of my maternity leave next summer.

In the past we have used it for trips to Hawaii, unexpected expenses (my Dad's funeral) and debt payoff or home improvements.

Future years will be used to beef up efund and to finish our basement.

[wanderlustfoodie]

Almost all of Mr. WF's comp is in the form of end-of-year bonus. We generally tend to live off of our base salaries (save very small portion of this) and save entire bonus.

[yellowbrkrd]

I don't get bonuses. DH gets quarterly bonuses. We usually put them towards savings or a big purchase/vacation. It really just depends.

[vanillacourage]

Split between mortgage, savings, college, and we usually buy one big thing or go on a big date night.

[moolarkey]

We don't get a cash bonus, we're a not for profit organization. We do each get an extra day off during the month of December (we chose the date).

[SJ]

I get quarterly bonuses. Bonuses have averaged about 30% of HHI

I save 20% of bonuses for taxes right away. This year I decided to dedicate $1,000 of every bonus to one of our charity pledges. I also used $1,000 from each bonus to put into each Roth IRA. The rest went to general investments or other short-term goals. We usually spend some on a trip or something fun as well.

[Deleted]

Also forgot charity.

[Deleted]

Holy crap some of you get substantial bonuses

[sewpinkgal]

We usually put a chunk towards a major debt item (SLs, car, etc) and the rest is put towards savings.

[aspentosh]

I was so happy about my $2500 bonus. Not so much anymore