Are you super responsible and "MM" and put it all towards something like paying extra on your mortgage or debt? Do you consider it in your regular income and use it as part of your regular budget?
Or do you do something fun with it? Vacation? Splurge?
Do you split it between different categories?
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I'm going to be getting a full bonus for the first time ever this year. I've been in my role three years, but for one reason or another we haven't hit our goals to get a 100% bonus.
The responsible thing to do would be to throw it at our debt from our kitchen remodel last year. The fun thing to do would be set aside money for my family to take a real family vacation, which we've not been able to afford thus far.
I usually do both. I get something for myself (clothes or jewelry) and then put the rest in savings (50% in vacation savings and the other 50% in long-term savings).
I would probably split it between savings, debt paydown and a splurge! If it was $10,000 I think I would put $5k to debt, $3k to savings and $2k to vacation.
Post by tripleshot on Jan 13, 2020 17:13:44 GMT -5
I always use it for our spring break cruise. We don’t currently have debt other than the mortgage. Years ago, I’d use it for house updates/repairs when we lived in a money pit and our incomes were much lower.
I wouldn’t put it towards the mortgage. In your case, I’d split it between your kitchen debt and a family vacation.
We are currently saving to buy a Tesla so it would all go towards that.
We just paid off all our debt (except mortgage) in November but previously we'd throw most of any bonus H got towards that and then each get some extra fun money.
What I would do is totally hypothetical because I work at a school and will never receive a bonus. How much is a family vacation? I’d probably put half towards debt and take a $5k vacation. Enjoy!
Post by SusanBAnthony on Jan 13, 2020 17:24:30 GMT -5
This will probably be unpopular, but unless your house literally had no kitchen, a kitchen remodel was a want, and apparently you wanted it more than a vacation. Pay off your first want (kitchen) before you buy your next want (vacation).
I wouldn't spend more than ~200$ on fun until debt is paid off and an e-fund is in place. If the kitchen debt is below 3% interest I'd still want money in "savings" (invested though) even if I was choosing not the pay it off.
Post by aprilsails on Jan 13, 2020 17:39:19 GMT -5
I split mine in half- half to retirement savings (I’m a bit behind but hitting my current targets so that is extra) and half to fun stuff, usually for myself. DH gets a much larger bonus. He usually puts some of it towards vacation and his retirement as well.
Post by goldengirlz on Jan 13, 2020 17:42:41 GMT -5
I’m getting a Tesla.
(What we do with it depends on the year. If we have a specific project/need, we’ll put it toward that. If we don’t, we save it because something always arises. This year, I had the best year of my life, bonus-wise, and I need/want a new car so I’m spending my bonus AND H’s with H’s grudging permission.)
We usually use ours to fund big house repairs/upgrades or to pay for family vacations for the year. Kind of depends on what we have going on Last year all our bonus checks went to replacing all the carpet and a new patio. This year it will be used for one big family vacation and a few smaller trips. Next year we plan to use it to out in a fence and pool.
Post by steamboat185 on Jan 13, 2020 17:55:28 GMT -5
We usually give ourselves 100 dollars per thousand to a max of 1k as fun money. They rest goes into savings- a portion to the car fund, some to the college funds, house fund, and then long term savings.
Just a caution, post tax will be a lot less than the pre tax amount your company probably told you.
But I would probably put most of it towards the remodel debt.
For us, bonuses just kind of mix in with everything else and at the end of the year we plan for the next year and allocate any extra as part of that process.
Post by notoriousmeg on Jan 13, 2020 18:38:49 GMT -5
Congrats! A large portion of our salaries are bonus, so we generally budget it the same as salary. But - when one of us has a particularly good year we put a good portion of it towards the mortgage (our only debt) and some towards vacation.
Just a caution, post tax will be a lot less than the pre tax amount your company probably told you.
But I would probably put most of it towards the remodel debt.
For us, bonuses just kind of mix in with everything else and at the end of the year we plan for the next year and allocate any extra as part of that process.
Yes, I definitely know that it will be at the supplemental tax rate. The ~$10k is probably a little high but about what I calculated it would be after taxes!
I have gotten between $5-10K the last few years. I usually take a few hundred dollars and do something fun with it and save the rest. Last year, I bought a Rogue Echo bike. This year, I’m going to 4 concerts in 5 days and paid for my hotels.
This will probably be unpopular, but unless your house literally had no kitchen, a kitchen remodel was a want, and apparently you wanted it more than a vacation. Pay off your first want (kitchen) before you buy your next want (vacation).
I wouldn't spend more than ~200$ on fun until debt is paid off and an e-fund is in place. If the kitchen debt is below 3% interest I'd still want money in "savings" (invested though) even if I was choosing not the pay it off.
I’m here-although I might take a long weekend to go somewhere close by, especially since your kids are young. A vacation will be so much better once the debt is gone.
i get a smaller bonus which we use for our travel for the year, but we don’t have any other debt and are funding retirement appropriately.
We've done it different ways over the years. Back when we had debt, prior to our Dave Ramsey plan, we did part to debt and part to a big trip, usually oeverseas. When we were on the DR plan, it all went to debt but that plan is very aggressive and it killed me!
Thankfully, right after the first of the year due to totally unexpected circumstances, we had a substantial amount of money come our way that wiped out our debt and set us up in a great place. So, I bought a Peleton and we booked a trip to France, and are probably going to NYC. So that's where I'd apply that $10K. I LOVE to travel and that's where a lot of our spending money goes. The Peleton made sense financially because it replaced my pricey gym that I was only using for spin class.
I’m usually boring and split it between savings and law school loans.
This year, I got a particularly large bonus and paid off the rest of my student loans last week (started at $225k 10 years ago - yay!).
We just wiped out our savings moving to a new house, so next year it will go to rebuilding our savings, with the aim of a major kitchen remodel we hope to do within the next few years.
Right now DH’s bonus is sitting in our checking account. It will likely go to paying off debt with a little fun mixed in. We’re going to go somewhere for fall break again, so his bonus will help with that.
I spent years as an academic and never got bonuses, so when I got my first sizable bonus this year I was super excited. And then I did the most dull thing possible: put a big chunk into long-term savings, another big chunk into my retirement account, and the biggest chunk of all to pay my 2019 Q4 taxes like a boring grown up.
While it wasn't exciting, it will free up $$$ in my budget for the rest of the year, which is good because I'm planning a huge birthday trip for a milestone birthday at the end of this year!